Client Alert

New Employment Laws and Requirements for 2018

By: Dwayne McKenzie and Cathy Moses

The California Legislature enacted and amended numerous state laws affecting employment and the workplace.  The following is a partial list of laws that will affect many employers’ day-to-day operations and may require review of employer policies and procedures to ensure continued compliance.

Salary Information (AB 168).  AB 168 is intended to expand equal pay protection in California by prohibiting all employers from relying on the salary history information of a job applicant as a factor in determining whether to hire the applicant or what salary to offer.  Under AB 168, an employer cannot, orally or in writing, personally or through an agent, seek salary history information, including compensation and benefits, about an applicant for employment.  However, the new law does not prohibit an applicant from voluntarily providing, without prompting, his or her salary history to a prospective employer.  Once voluntarily offered, an employer may consider disclosed salary history information but only to determine the amount of salary for the employee.  AB 168 also requires the employer to provide, upon reasonable request, the pay scale for a position to an applicant.  Employers should establish practices regarding these restrictions for individuals involved in the hiring and recruitment process, and review form documents such as application forms to ensure compliance.

Ban-the-Box Law – Criminal Convictions (AB 1008).  Existing law prohibits an employer from asking an applicant for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning an arrest or detention that did not result in a conviction.  AB 1008 expands the restrictions against inquiring about an applicant’s criminal record by prohibiting employers with five or more employees from including on an application for employment any question that seeks the disclosure of an applicant’s conviction history.  Under AB 1008, an employer may inquire into or consider the conviction history of an applicant only after making a conditional offer of employment to the applicant.  If an employer intends to deny employment based in part on the applicant’s conviction history, the employer must (i) 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, (ii) notify the employee of any preliminary decision that the applicant’s conviction history disqualifies the applicant, (iii) permit the applicant an opportunity to respond, and (iv) notify the applicant of any final denial or disqualification, any procedures the employer has for challenging the decision, and the applicant’s right to file a complaint with the Department of Fair Employment and Housing.  Employers should ensure their hiring processes conform to these technical procedures for considering criminal histories of applicants.

Gender Identity, Gender Expression, and Sexual Orientation (SB 396).  The Fair Employment and Housing Act (FEHA) requires employers with 50 or more employees to provide at least two hours of sexual harassment training to all supervisory employees within six months of their assumption of a supervisory position, and then once every two years.  SB 396, the Transgender Work Opportunity Act, requires that the training also address harassment based on gender identity, gender expression, and sexual orientation.  Training should include practical examples and should be presented by trainers or educators who have knowledge or expertise in those areas.  SB 396 also adds that, in addition to posting a poster in the workplace against discrimination in employment, a poster regarding transgender rights should be posted in a prominent and accessible place.

The New Parent Leave Act (SB 63).  The Family and Medical Leave Act and California Family Rights Act currently provide parental leave rights to employees of employers having 50 or more employees.  SB 63 expands parental leave obligations to employers with 20 or more employees, requiring them to provide employees up to 12 weeks of unpaid job-protected leave to bond with a new child within one year of the child’s birth, adoption or foster care placement.  To be eligible for the leave, employees must have worked for the employer more than 12 months, worked at least 1,250 hours during the prior 12-month period, and work at a worksite where there are at least 20 employees within a 75-mile radius.  For employees on leave, employers must maintain and pay for coverage under a group health plan at the same level and conditions that coverage would have been provided if the employee had continued working.  Prior to or on commencement of their leave, employees must be provided a guarantee of reinstatement to the same or comparable position.  An employer’s failure to provide the guarantee is equivalent to not providing the leave and is a violation of law.  Employers cannot discriminate against or take other adverse employment actions against an employee for exercising their right to parental leave or giving information or testimony in relation to the employee’s or another’s parental leave.  Employers, particularly those with 20–49 employees who previously have not been required to provide parental leave, should consider updating their employee leave policies and handbooks and should ensure that their human resources personnel are prepared to implement these requirements.

Immigration Worksite Enforcement Actions (AB 450).  AB 450 sets forth several new obligations on employers with regard to federal immigration worksite enforcement actions. The bill prohibits an employer from voluntarily consenting to an immigration enforcement agent to access, review, or obtain employee records without a subpoena or judicial warrant, or to enter any nonpublic areas of a place of labor, unless the immigration agent has a warrant.  Employers must also provide notice to employees, by posting a notice in the language that the employer usually uses to communicate employment-related information to the employee, of any inspections of I-9 forms or other employment records within 72 hours of receiving the notice of the inspection.  In addition, within 72 hours of receiving the agency notice that provides the results of the inspection, an employer must provide to each affected employee, and the employee’s authorized representative, a copy of the notice of results and written notice of the obligations of the employer and the affected employee arising from the results of the inspection.  This notice should contain a description of all deficiencies or other items identified in the immigration inspection results notice that relate to the affected employee, the time period for correcting any potential deficiencies, the time and date of any meeting with the employer to correct such deficiencies, and notice that the employee has the right to representation during any meeting scheduled with the employer.  Employers who violate these provisions are subject to civil penalties between $2,000 and $5,000.  Furthermore, an employer is prohibited from re-verifying the employment eligibility of a current employee in a time or manner not required by federal law.  Employers will need to educate on-site employees to be prepared to properly address immigration enforcement investigations. 

Construction Contractor Liability for Wage and Benefit Payments to Subcontractor Employees (AB 1701).  AB 1701 requires prime contractors on private works of construction to assume and be liable for employee wage, fringe and other benefit payments owed to a wage claimant that is incurred by a subcontractor of any tier acting under, by, or for the contractor.  The contractor’s liability extends only to wage, fringe, or other benefit payments or contributions, not to penalties or liquidated damages.  Under the new law, the contractor’s property can be attached after trial for the payment of any judgment.  Upon request from the contractor, a subcontractor of any tier must provide payroll records, sufficient to inform the contractor of the subcontractor’s payment status in making fringe or other benefit payments or contributions to or on behalf of the employee.  An action to enforce the liability against the prime contractor can be brought only by the Labor Commissioner, a third party owed fringe or other benefit payments or contributions on a wage claimant’s behalf, or a joint labor-management cooperation committee.  AB 1701 does not provide an individual worker a right to sue.  Any action must be filed within one year of the earliest of recordation of a notice of completion of the direct contract, recordation of a notice of cessation of the work covered by direct contract, or actual completion of work covered by the direct contract.  AB 1701 is a broad expansion of a prime contractor’s liability on private works.  Contractors will want to consider revising their subcontract forms to address this significant new liability.  Further amendments are expected in 2018 that may clarify language in the new law.

Reminder - Paid Family Leave Benefits (AB 908).  Paid Family Leave (“PFL”) is a state program funded by employee contributions that provides short-term benefits to workers who experience a loss of wages due to a need to care for a seriously ill family member or to bond with a new child.  In 2016, the Legislature passed AB 908 which increases, effective January 1, 2018, the amount of paid family leave benefits an employee may receive from the current rate of 55 percent of earnings up to 60 or 70 percent, depending on the employee’s income, up to a maximum weekly benefit.  Effective January 1, 2019, AB 908 also removes the seven-day waiting period before an employee may receive paid family leave benefits.  Employees eligible for leave under the New Parent Leave Act will be able to apply for wage replacement benefits under PFL.  Employer human resource personnel will need to be aware of the changes so they can continue to properly advise employees and coordinate PFL benefits.

Reminder – Increase in Minimum Wage.  Effective on and after January 1, 2018, the state minimum wage increases to $11.00 per hour for employers with 26 or more employees and to $10.50 per hour for employers with 25 or fewer employees.  


If you have any questions concerning the subject of this article, please contact a member of our Labor & Employment group:

Dwayne McKenzie at 310.284.2279 or
Charles Noneman at 310.284.2236 or

Cox, Castle & Nicholson LLP is a full service law firm offering comprehensive legal services to the business community and specialized services for the real estate and construction industries.  Reproduction is prohibited without written permission from the publisher.  The publisher is not engaged in rendering legal, investment, business or insurance counseling through this publication.  No statement is to be construed as legal, investment, business or insurance advice.

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