Employment Law Updates – January 2017

Increase in minimum wage/salary

The statewide California minimum wage will increase to $10.50 per hour on January 1, 2017 for employers with 26 or more employees; the minimum wage for employers with 25 or fewer employees will remain $10.00 per hour. Almost thirty different counties and cities in California have adopted an accelerated schedule for increasing the minimum wage to eventually reaching $15.00 per hour and may have a minimum wage that is higher than the statewide standard. Please contact us if you are unsure whether your municipality has a higher minimum wage than the statewide standard.

The statewide California minimum salary for exempt employees will increase to $43,680 on January 1, 2017 for employers with 26 or more employees as the California minimum salary for exempt employees is directly tied to the minimum wage. The minimum salary for exempt employees will remain at $41,600 for employers with 25 or fewer employees. A municipality with a minimum wage higher than the statewide minimum wage will not affect the minimum salaries for exempt employees. Please contact our office for an analysis of whether your salaried employees are properly classified as exempt.

AB 1066 – Eliminates the overtime exemption for agricultural workers

A previous exemption allowed agricultural farm workers to work up to ten hours in a workday without overtime. AB 1066 has eliminated that exemption and requires all agricultural farm workers be paid overtime for all time worked in excess of eight hours in a workday.

AB 1676 & SB 1063 – Wage discrimination and application to race and ethnicity

Under the Fair Pay Act, which went into effect on January 1, 2016, existing law generally prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. SB 1063 expands the requirements of the Fair Pay Act to include employees’ race or ethnicity and not just gender. AB 1676 provides that an employee’s past salary alone cannot justify a disparity in compensation and must be tied to other bona fide factors.

AB 1843 – Juvenile criminal history in employment applications

Ab 1843 prohibits employers from asking applicants to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to “an arrest, detention, process, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.” Employment applications that inquire as to an applicant’s criminal background must be modified to comply with this new law.

City of Los Angeles – Ban the Box Ordinance

Los Angeles’ new ‘Ban the Box’ ordinance forbids employers from asking job applicants whether the applicant has been convicted of a crime or has been arrested for a crime and is awaiting criminal proceedings. All employment applications used for employers in the City of Los Angeles must be revised to remove language that asks about a criminal history.

AB 2535 – Itemized wage statements clarification

AB 2535 clarifies that Labor Code Section 226 does not require employers to include in itemized wage statements the total number of work hours by an employee properly classified as exempt. Employers must continue to include the total hours worked by non-exempt employees in the itemized wage statements for each pay period.

SB 1001 – Immigration related unfair practices

Employers who are in the process of verifying that workers have the necessary documentation to work in the United States are prohibited from requesting of such workers more documents or different documents than are required under federal law, to refuse to honor documents tendered that on their face reasonably appear to be genuine, to refuse to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work, or to reinvestigate or re-verify an incumbent employee’s authorization to work. Under this Bill, which adds Labor Code Section 1019.1, applicants and employees may file a complaint with the Division of Labor Standards Enforcement. Any person who is deemed in violation of this new law is subject to a penalty imposed by the Labor Commissioner of up to $10,000, among other relief available.

SB 1241 – Choice of law and forum in employment agreements

SB 1241 adds Labor Code Section 925 and prohibits employers from requiring California-based employees to enter into agreements (including arbitration agreements) requiring them to: (1) adjudicate claims arising in California in a non-California forum; or (2) litigate their claims under the law of another jurisdiction, unless the employee was represented by counsel. Any provision of a contract that violates this new law is voidable by the employee, any dispute arising thereunder shall be adjudicated in California under California law and the employee is entitled to recover reasonable attorneys’ fees.

AB 2883 – Director and officer exclusions on workers’ compensation policies

AB 2883 changes the definition of employee and the eligibility criteria to elect exclusion from workers’ compensation coverage. Only corporate officers or members of the company’s board of directors who own 15% or more of the company may elect to be excluded from coverage. Each officer or director who owns 15% or more of the company and wishes to be excluded from coverage must sign a new waiver form attesting to his or her eligibility. The requirement that 100% of the company be owned by officers and/or directors has been eliminated. If your officers or directors are currently excluded from coverage, please contact your workers’ compensation carrier, agent, or broker.

AB 2330 – Minimum salary of private teachers

AB 2330 requires private primary and secondary schools to pay exempt teachers no less than the lowest salary offered by any school district anywhere in the State or the equivalent of no less than 70% of the lowest schedule salary offered by the school district or county in which the private elementary or secondary institution is located. Private teachers’ minimum salaries will no longer be tied to the State’s minimum wage.

AB 1311 – Temporary security guard services employees

AB 1311 requires that security guards employed by private patrol operators that are temporary services employers be paid weekly similar to other temporary services employees.

San Jose Initiative

San Jose voters passed an initiative in November that requires employers to offer hours to existing employees before hiring new employees.