New California Employment Laws For 2013

There are a number of new laws affecting the employer-employee relationship which will go into effect on January 1, 2013.
Social Media. The change which has garnered significant media attention is AB 1844 which adds section 980 to the Labor Code, prohibiting employers from requiring or requesting either an employee or an applicant to: disclose a username or password for the purpose of accessing personal social media; access personal social media in the presence of the employer; or divulge any personal social media, except as provided. The legislation includes important exceptions. An employer may request an employee to divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes of that investigation or a related proceeding. Further, for the purpose of accessing an employer-issued electronic device, an employer may require or request an employee to disclose a username, password, or other method of access.

Comment: Employers should be careful that they refrain from any disciplinary action if an employee declines a request or demand authorized by this law. Section 980 expressly bans discipline for that reason but does not prohibit an employer from terminating or otherwise taking an adverse action against an employee or applicant if otherwise permitted by law. Actions taken in this regard should be carefully documented with due concern for this distinction.

Religious Accommodation. Under the Fair Employment & Housing Act [FEHA], employers must accommodate religious beliefs and observances of their employees, unless it would cause an “undue hardship” to the employer. AB 1964 amends FEHA to include a “religious dress practice or a religious grooming practice” as protected against religious discrimination. In response to cases involving reassignment of an employee wearing religiously mandated head covering to positions out of public view, AB 1964 also ban segregation of the employee from the public or other employees as an “accommodation.” The amendment also specifies that “undue hardship” requires “significant difficulty or expense” based on consideration of enumerated factors. “Religious dress practice or a religious grooming practice” are to be construed broadly and include all forms of head, facial, and body hair and the wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts, and any other item that is part of the observance by an individual of his/her religious creed.

Comment: If an employer is aware that an employee’s clothing, grooming, jewelry, etc. may be required by a bona fide religious belief, he or she should be very cautious in considering any change in the employee’s work location or environment on that basis.

Breast Feeding. Existing law bars discriminatory practices based on “sex,” defined as pregnancy, childbirth, or medical conditions related to pregnancy or childbirth, and gender. AB 2386 amended FEHA to add “breastfeeding or medical conditions related to breastfeeding” to the definition.

Comment: Existing law requires employers provide reasonable break time and a place to express milk, subject to certain restrictions.

Personnel Files. Under existing law, an employee has the right to inspect the personnel records that his or her employer maintains relating to the employee’s performance or to any grievance concerning the employee. Some particulars of an employer’s obligations have been unsettled. AB 2674 amends Labor Code section 1198.5 to clarify some of those obligations. It requires an employer to retain personnel records for three years following termination of employment. It also allows a current or former employee, or his or her representative, an opportunity to inspect and receive a copy of those records within 30 days of a request, except while a lawsuit filed by the employee or former employer relating to a personnel matter is pending. The amendment limits former employees to one request per year. It also provides that an employer is not required to comply with more than 50 requests for copies of personnel records filed by a “representative or representatives of” employees in one calendar month.

The amendment also adds additional detail to where and how an inspection may occur and permits the employer to redact the names of any nonsupervisory employees. It does not apply with respect to an employee covered by a valid collective bargaining agreement if the agreement provides, among other things, for a procedure for inspection and copying of personnel records. Employers are required to provide a form to an employee for an inspection request if the employee requests one his or her supervisor.

An employer’s failure to comply can result in a $750 penalty, an injunction compelling compliance and an award of attorneys’ fees and costs to the employee.

Wage Statements: Temporary Service Employers. Existing law requires that every employer furnish to each employee an itemized written wage statements showing numerous specified items. A knowing and intentional violation is a misdemeanor. AB 1744 amends Labor Code section 226 to add requirements for temporary services employers. Temporary services employers (except for certain security services employers) must specify the rate of pay and the total hours worked for each assignment. This requirement does not go into effect until July 1, 2013.

Existing law also requires an employer to provide each employee, at the time of hiring, with a notice that includes specified wage information. AB 1744 amends Labor Code section 2810.5 to require that temporary services employers to include the name, address and telephone number of each entity for whom the employee will perform work. The Labor Commissioner is authorized to require additional items that it “deems material and necessary.”

Wage Statements: Penalties. Existing law requires an employee prove injury as a result of a knowing and intentional failure by an employer to comply with the wage statement requirement in order to recover a penalty and an award of costs and reasonable attorneys’ fees. SB 1255 amends Labor Code section 226 to state that a failure to provide a wage statement accurately containing all of the required information is “injury” for purposes of entitlement to award of a penalty, attorneys’ fees and costs. Penalties remain the greater of actual damage or $50 for the initial pay period, and $100 for each subsequent pay period, up to an aggregate of $4,000.

Comment: SB 1255 does not remove the requirement that the failure be “knowing and intentional.” It does, however, remove one element from an employee’s burden of proof and thus adds risk in almost all wage claims. The requirements regarding information to be included in wage statements are detailed and easy to violate. Employers may wish to confirm compliance even if they use an outside payroll service.

Overtime For “Salaried” Non-Exempt Employees. Some employers pay a salary to employees who are not exempt from overtime. AB 2103 amends Labor Code section 515 to provide that such a salary is compensation only for the employee’s regular, non-overtime hours, notwithstanding any private agreement to the contrary.

Comment: Paying a non-exempt employee a “salary” can be a trap for the unwary. An agreement to pay an employee a “salary” does not make that employee exempt from overtime (or meal and rest period) requirements. If the employer is not careful, such an arrangement can result in wage statement violations. This amendment makes explicit pre-existing interpretation of California law that, if the employee is non-exempt, he or she is entitled to overtime regardless of any agreement otherwise. Private agreements to avoid paying overtime by characterizing compensation as “salary” or to avoid payroll tax obligations by classifying an employee as an independent contractor (or a “1099”) expose employers to substantial liability, including potential fines and even criminal prosecution.

Commissions. Effective January 1, 2013, all employers paying employees a commission must have a written contract with the employee which specifies the method by which commissions will be calculated and paid. Limited exceptions are provided in the case of short-term productivity bonuses such as are paid to retail clerk, certain temporary, variable incentive payments, and certain bonus and profit-sharing plans.

Comment: A commission is compensation based proportionately upon the amount or value of property or services sold by the employee. All employers, not just those paying commissions, should consider having a written employment contract with every employee.

By James Parton III

Parton | Sell | Rhoades, PC

For questions or more information about this topic, please contact Jim Parton
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There are a number of new laws affecting the employer-employee relationship which will go into effect on January 1, 2013. Social Media. The change which has garnered significant media attention is AB 1844 which adds section 980 to the Labor Code, prohibiting employers from requiring or requesting either an employee or an applicant to: disclose […]