A Spate of New California Employment Laws

 

aaGovernor Brown has signed a number of new laws affecting California employers. This post briefly discusses a few of them.

Increased Statewide Minimum Wage

Senate Bill (SB) 3 provides for six stepped annual statewide increases in the minimum wage, currently $10 an hour, for employers with 26 or more employees. The minimum wage will increase, beginning on January 1, 2017, as follows:

  • Starting January 1, 2017, $10.50 per hour
  • Starting January 1, 2018, $11 per hour
  • Starting January 1, 2019, $12 per hour
  • Starting January 1, 2020, $13 per hour
  • Starting January 1, 2021, $14 per hour
  • Starting January 1, 2022, $15 per hour

Employers with 25 or fewer employers have an extra year to comply with each new wage rate. Bear in mind that individual municipalities may set minimum wage rates that exceed this schedule.

 Employers Cannot Choose Venue or Law in Employment Contracts

Some employers have historically included choice of venue or law clauses in employment contracts. Such clauses dictate where an employee can bring a civil lawsuit or what state (or federal) law would apply in deciding disputes. New California Labor Code Section 925 prohibits employers from including contract provisions as a condition of employment that require application of another state’s law or dictate that suits must be filed in another state court. This law will apply to employment contracts signed, modified or extended on or after January 1, 2017.

Notification of Certain Leave Rights

Assembly Bill (AB) 2337, effective January 1, 2017, will require employers to inform each worker of his or her employment leave rights as a possible victim of domestic violence, sexual assault, or stalking, by providing that information in writing to newly hired employees. Existing employees are entitled to such information upon request.

Restriction on Use of Applicant’s Juvenile Records in Employment Decisions

AB 1843, also effective January 1, 2017, will prohibit employers from inquiring about and considering information concerning “an arrest, detention, process, diversion, supervision, adjudication, or court disposition” that occurred while an applicant or employee was under the jurisdiction of the juvenile court.

Legislative Approval of California Secure Choice Retirement Savings Program

Under SB 1234, employers with five or more employees that do not already offer an employer-sponsored retirement plan will be required either to offer an employer-sponsored retirement plan or to automatically enroll their employees in Secure Choice by creating a payroll contribution to the employee’s personal California Secure Choice Retirement Savings account. The legislation was intended to saddle employers with only minimal administrative burdens. They will be required to: (1) enable employees to make an automatic contribution from their paycheck into their Secure Choice Account; (2) transmit the payroll contribution to a third-party administrator to be determined by the Board; and (3) potentially provide state-developed informational materials about the program to employees.

Extension of Equal Pay Protections to Race and Ethnicity

Readers of this Bulletin will recall that, last year, the California Equal Pay Act was amended to require employers to pay the same wage as between a male and female employees who perform substantially similar work. On September 30, 2016, Governor Brown signed the Wage and Equality Act of 2016, SB 1063. Effective January 1, 2017, this will extend the protections provided by the Equal Pay Act to employees of different races or ethnicities. Thus, employees who perform substantially similar work must be paid equally, regardless of differences in gender, race or ethnicity.

As with the Equal Pay Act, pay differential between workers of different races or ethnicities may be allowed if it is based on a reasonably applied factor such as a seniority system, merit system, system that measures earning by quantity or quality of production, or some bona fide factor other than race or ethnicity.

Conclusion

Employers with questions concerning any of these new or amended California employment laws should not hesitate to contact their experienced employment law counsel.

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