Oct. 16, 2017 California Governor signs new employment legislation affecting employers

California Governor Jerry Brown Signs Laws Banning Employers From Inquiring About an Applicant’s Salary History and Pre-Offer Inquiries into Criminal History, and Other New Employment Laws

Summary

With the stroke of a pen last week, California Governor Jerry Brown added California to the growing list of states and municipalities that prohibit employers from inquiring into an applicant’s salary history.  This new law, which follows the 2015 Fair Pay Act, is another step in the Legislature’s effort to eliminate the wage gap between men and women.

The Legislature passed a second bill related to pay equity, Assembly Bill 1209, which would have required employers with 500 or more employees in California to provide the Secretary of State with specific information regarding gender wage differentials for exempt employees and board members.  However, Governor Brown vetoed the bill, recognizing it to be ambiguous as written and that the “ambiguity could be exploited to encourage more litigation than pay equity.”  But vetoed bills often return with slight revisions in future legislative sessions, so this issue is one to watch in the coming year.

The Legislature also expanded California’s so-called “Ban the Box” law to prohibit employers from including questions on an employment application seeking disclosure of a job applicant’s conviction history and inquiring into or considering an applicant’s conviction history until after extending a conditional offer of employment.  Among other things, the law requires employers to conduct an individualized assessment before deciding not to hire the candidate.

In addition, the Legislature passed several other laws affecting employers this session.  October 15, 2017 was the deadline for Governor Brown to sign or veto those bills.  Here is a brief overview of the employment laws affecting California employers.  Unless otherwise noted, the new laws will go into effect January 1, 2018.  Paul, Plevin will review the key new laws at the firm’s annual Employment Law Update on October 24, 2017.

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Discussion

The most significant laws for employers:

AB 44 by Assembly Member Eloise Gómez Reyes (D-San Bernardino) – Workers’ compensation: medical treatment: terrorist attacks: workplace violence.  This law requires employers to provide immediate support from a nurse case manager to employees injured in the course of employment by an act of domestic terrorism, requires employer-appointed nurse case managers to assist claimants to obtain medically necessary medical treatments, and requires an employer to provide special notices to claimants.

AB 168 by Assembly Member Susan Eggman (D-Stockton)Employers: salary information.  As noted above, this law prohibits an employer from relying on an applicant’s salary history as a factor in determining whether to offer an applicant employment or what salary to offer an applicant.  The law also prohibits an employer from seeking salary history information about an applicant and requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant. The bill does not prohibit an applicant from voluntarily and without prompting disclosing salary history information and would not prohibit an employer from considering or relying on that voluntarily disclosed salary history information in determining salary, as specified.  An amendment to the Fair Pay Act last year provided that an employer cannot rely solely on past pay to justify an employee’s compensation.

AB 450 by Assembly Member David Chiu (D-San Francisco) –  Employment regulation: immigration worksite enforcement actions.  This law, known as the “Immigrant Worker Protection Act,” prohibits an employer from providing voluntary consent to an immigration enforcement agent to enter nonpublic areas of a place of labor unless the agent provides a judicial warrant.  The law also prohibits an employer from providing voluntary consent to an immigration enforcement agent to access, review, or obtain the employer’s employee records without a subpoena or court order.  In addition, the law prohibit an employer from reverifying the employment eligibility of a current employee at a time or in a manner not required by specified federal law.

AB 1008 by Assembly Member Kevin McCarty (D-Sacramento) Employment discrimination: conviction history.  Among other things, this law prohibits an employer from inquiring – verbally or in writing – about an applicant’s criminal history before the employer makes a conditional offer of employment.  The law also imposes the burden on employers to make an “individualized assessment” of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position. In making the assessment, the employer must consider all of the following: (i) the nature and gravity of the offense or conduct; (ii) the time that has passed since the offense or conduct and completion of the sentence;  (iii) the nature of the job held or sought.  This statewide law mirrors many provisions of the recently enacted San Francisco and Los Angeles Fair Chance ordinances.

AB 1556 by Assembly Member Mark Stone (D-Scotts Valley)Employment discrimination: unlawful employment practices.  This law revises the text of the California Family Rights Act to delete references to “female person” and “female employee” and refers instead to “person” and “employee.”

AB 1710 by the Committee on Veterans AffairsProhibited discrimination against service members.  This law revises the text of Section 394 of the Military and Veterans Code to prohibit discrimination against service members in the “terms, conditions, or privileges with respect to that member’s employment.”  The law also extends the core principles of the federal Uniformed Services Employment and Reemployment Rights Act (“USERRA“) by prohibiting discrimination against members of the military or naval forces of the state, which includes the California National Guard, State Military Reserve, and Naval Militia, and ensures that protections consistent with USERRA are extended to service members if they are additionally called to state military service.

SB 63 by Senator Hannah-Beth Jackson (D-Santa Barbara)Unlawful employment practice: parental leave.  This law, called the New Parent Leave Act, provides 12 weeks of job-protected maternity and paternity leave for employees who work for smaller companies with 20 to 49 employees.  (Under current law, only those who work for an employer of 50 or more are eligible for job-protected leave.)  The new law also requires employers to maintain and pay for coverage under a group health plan for an employee who takes this leave.  The law provides for a two-year pilot program within the Department of Fair Employment and Housing to allow employers and employees to mediate disputes under this new parental leave program prior to the filing of litigation.

SB 179 by Senator Toni Atkins (D-San Diego)Gender identity: female, male, or non-binary.  This law, called the Gender Recognition Act, provides three equally recognized gender options on state-issued identification documents—female, male, and nonbinary—and an efficient and fair process for people to amend their gender designation on state-issued identification documents so that state-issued identification documents legally recognize a person’s accurate gender identification.  Although this law does not specifically address employers, we expect the nonbinary designation to affect employers in the coming months and years as gender relates to employment applications, insurance, and EEO documentation.

SB 306 by Senator Robert M. Hertzberg (D-Van Nuys)Retaliation actions: complaints: administrative review.  This law authorizes the California Department of Labor Standards Enforcement to investigate an employer, with or without a complaint being filed, when retaliation or discrimination is suspected during a wage claim or other investigation being conducted by the Labor Commissioner.

What This Means

To address the new ban on requesting salary information, employers should re-evaluate each step of the hiring process to ensure applicants are not asked about prior salary history, verbally or in writing.  Instead, applicants may be asked about their salary expectations.  Employers should also prepare pay bands for each position before beginning the recruiting process.

To avoid discrimination claims, employers should remove questions about criminal history from employment application materials and avoid inquiries about criminal history until after a conditional offer is made.  Because of the law’s requirement to conduct an “individualized assessment,” documentation of the rationale for adverse decisions is more important than ever.  Employers should be aware that these new requirements are in addition to employer’s existing obligations under the federal Fair Credit Reporting Act and the equivalent state law, the Investigative Consumer Reporting Agencies Act.

In addition, employers with 20-49 employees will want to ensure their leave policies provide for “baby bonding” time as required under the new law.

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This E-Update was authored by Camille Gustafson.  For more information, please contact Ms. Gustafson or any other Paul, Plevin attorney by calling (619) 237-5200.