FWEDA News

ARTICLE

Date ArticleType
11/18/2016 Human Resource
2017 Laws Affecting California Employers

Untitled 2

An Overview of New 2017 Laws Affecting California Employers

 

California enacted new employment laws that may affect the day-to-day operations of your businesses in 2017 and beyond.

 

Employers will need to be aware of significant changes in key areas, such as the state minimum wage. Other new laws make small changes to different parts of existing law or may relate only to specific industries.

 

Unless specified, all new legislation goes into effect on January 1, 2017. This year, many bills feature delayed or phased-in implementation.

 

Wage and Hour

 

Several new California laws will affect employers’ wage-and-hour obligations in 2017.  In addition to California laws, don’t forget the new federal overtime rule going into effect on December 1, 2016.

 

Minimum Wage

SB 3 will increase the minimum wage over the next several years to $15 an hour. For January 1, 2017, businesses with 26 or more employees must pay a minimum wage of $10.50 per hour. Small businesses with 25 or fewer employees are not required to begin the scheduled increase until 2018. The legislation allows for future increases to the minimum wage based on the Consumer Price Index.

 

The minimum wage increase will require all employers to post a new Minimum Wage Order (MW-2017). The upcoming minimum wage increase also will have an effect on other pay practices, such as the overtime rate.

 

Agricultural Overtime

AB 1066 will phase in increased overtime requirements for agricultural employees over the course of four years beginning January 1, 2019. Currently, agricultural employees are exempt from certain wage requirements.

 

Agricultural employers will initially start paying overtime when employees work more than 9.5 hours per day/55 hours per week. This number will decrease yearly until it reaches 8 hours per day/40 hours per week by January 1, 2022. Employers with 25 or fewer employees will have an additional three years to comply with the phasing in of these requirements and won’t start paying overtime until 2022.

 

In addition to phased in overtime, AB 1066 eliminates an important existing exemption for agricultural employers. Currently, agricultural employers are exempt from the Labor Code requirement to provide one day’s rest in seven worked. Effective January 1, 2017, agricultural employers are no longer exempt from this provision and cannot cause employees to work more than six days in seven.

 

Payroll

AB 1847 requires employers who must notify employees of their eligibility for the federal Earned Income Tax Credit to also notify these employees that they may be eligible for the California Earned Income Tax Credit. The bill updates the required notice that must be given to employees.

 

Local Wage Enforcement

SB 1342 grants local officials or department heads the power to issue subpoenas and to report noncompliance with employment-related ordinances, such as local minimum wage ordinances, to superior court judges. The legislative intent of this new law further encourages cities and counties to enact measures to combat wage theft.

 

Discrimination and Retaliation Protections

Several new laws expand employee protections for 2017.

 

Fair Pay

Last year, significant amendments were made to California’s equal pay laws to address gender wage inequality. This year, two new bills expand California’s Fair Pay Act.

 

• SB 1063 prohibits an employer from paying any of its employees wage rates that are less than the rates paid to employees of another race or ethnicity for substantially similar work.

• AB 1676 specifies that, under the Fair Pay Act, prior salary cannot, by itself, justify any disparity in compensation. The law is intended to “help ensure that both employers and workers are able to negotiate and set salaries based on the requirements, expectations, and qualifications of the person and the job in question, rather than on an individual’s prior earnings, which may reflect widespread, long-standing, gender-based wage disparities in the labor market.”

 

All-Gender Restrooms

AB 1732 sets a new requirement that, beginning March 1, 2017, all single-user toilet facilities in any business establishment, place of public accommodation or government agency must be identified as “all-gender” toilet facilities.

 

Immigration-Related Protections

Employers are required by federal law to verify an employee’s eligibility to work using the Form I-9 process. Under federal law, it is unlawful for employers to ask for more or different documentation than is required by the Form I-9, refuse to accept documents that appear genuine on their face or engage in other types of document abuse. SB 1001 makes this type of conduct unlawful under state law as well.

 

Discrimination Regulations and Enforcement

SB 1442 consolidates various anti-discrimination regulations and enforcement and investigatory powers under the jurisdiction of the DFEH. It removes other state agencies’ authority to issue regulations prohibiting discrimination.

 

Leaves of Absence and Benefits

Several new laws relate to employee benefits and leaves of absences.

Paid Family Leave Benefits

Effective January 1, 2018, AB 908 increases the amount of paid family leave (PFL) benefits an employee can receive from 55 percent of earnings to either 60 percent or 70 percent of earnings, depending on the employee’s income. There still will be a maximum weekly benefit on the amount received. The new law also will remove the current seven-day waiting period that exists before an employee is eligible to receive PFL benefits.

 

Domestic Violence, Sexual Assault and Stalking Protections

AB 2337 requires employers with 25 or more employees to provide employees with written notice about the rights of victims of domestic violence, sexual assault and stalking to take protected time off for medical treatment or legal proceedings.

 

A required form must be given to all new employees when hired and to current employees upon request. The Labor Commissioner is required to develop the form on or before July 1, 2017. Employers are not required to comply with this notice requirement until the Labor Commissioner posts the new form on its website.

 

Private Retirement Savings Plans

SB 1234 approves the California Secure Choice Retirement Savings Program (SCRSP), which is a state-run retirement plan for private-sector workers. Specific prerequisites must be met before the SCRSP can be implemented, and it may be some time before we actually see this program up and running.

 

Under SB 1234, employers with five or more employees that do not offer specified retirement plans must put a payroll arrangement into place so that employees may contribute a portion of their salary or wages to a retirement saving program in the SCRSP.

 

Background Checks

Juvenile Criminal History Information

AB 1843 prohibits employers from inquiring into an applicant’s juvenile convictions or using such convictions as a factor in determining any condition of employment.

 

Workplace Safety

Indoor Heat Illness

SB 1167 requires Cal/OSHA to propose a heat-illness and injury prevention standard for indoor workers by January 1, 2019. SB 1167 does not specify what provisions will be included in the new rule or what types of workplaces will be covered — potentially, the new rule could include all indoor workplaces.