Client Alert

New Employment Laws and Requirements for 2019

By: Dwayne McKenzie and Cathy Moses

The California Legislature was active this year in enacting and amending state laws affecting employment and the workplace, including several new laws influenced by the Me Too movement.  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.

Unlawful Discrimination and Harassment (SB 1300).  AB 1300 implements numerous, wide-ranging changes to the Fair Employment and Housing Act (FEHA) with respect to workplace harassment claims. Employers are prohibited from requiring that an employee, in exchange for a raise or bonus, or as a condition of employment, release claims or rights under the FEHA, or sign a nondisparagement agreement or other document denying the employee the right to disclose unlawful acts in the workplace, including sexual harassment.  This prohibition does not apply to a negotiated settlement agreement.  In addition, while the FEHA authorizes courts to award prevailing parties their attorneys’ fees and costs under certain circumstances, SB 1300 prohibits an award of fees and costs to a prevailing defendant unless the action was frivolous, unreasonable or groundless when brought or that the plaintiff continued to litigate after it clearly became so.  SB 1300 further states that employers may, but are not required to, provide bystander intervention training that includes information and practical guidance on how to enable bystanders to recognize potentially problematic behaviors, and to motivate bystanders to take action if they see such behaviors.  Employers should review their employee agreements and policies to ensure compliance with these restrictions.

Sexual Harassment Training (SB 1343).  Current law requires that employers with 50 or more employees provide sexual harassment prevention training to all supervisors in California.  SB 1343 expands this training requirement, requiring employers with five or more employees, including seasonal and temporary employees, to provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every two years thereafter.  The Department of Fair Employment and Housing (DFEH) is to develop or obtain online training courses that it will make available on its website.  Since the training mandate for nonsupervisory employees is new, all employers with five or more employees will need to be prepared to comply with these expanded requirements.

Defamation Protection (AB 2770).  To ensure that victims of sexual harassment and employers will not be sued for defamation by the alleged wrongdoer, AB 2770 extends the litigation privilege (which protects statements made in conjunction with judicial proceedings) to complaints of sexual harassment.  This includes complaints by an employee to an employer that are made without malice, as well as communications between the employer and interested persons (such as witnesses), regarding a complaint of sexual harassment.  It also permits a current or former employer, or an agent of the employer, to answer, without malice, whether or not the employer would rehire a current or former employee and whether that decision is based on the employer’s determination that the former employee engaged in sexual harassment.  Although AB 2770 may protect certain statements made in relation to employment verification requests, employers should consider disclosing only limited information, such as job title and employment dates, in response to such requests.

Confidentiality Clauses in Settlement Agreements (SB 820).  For settlement agreements entered into on or after January 1, 2019, SB 820 prohibits and makes void provisions that prevent the disclosure of facts relating to claims filed in civil or administrative actions regarding acts of sexual assault, sexual harassment, and workplace harassment based on sex.  However, at the claimant’s request, provisions shielding the identity of the claimant and all facts that could lead to his or her discovery may be included within a settlement agreement, provided a government agency or public official is not a party to the agreement.  Employers should ensure that their form agreements are compliant with the new limitations.

Gender Representation on Boards of Directors (SB 826).  SB 826 requires that any publicly held corporations whose principal executive offices are located in California have a minimum of one female director on its board of directors by the end of 2019.  By the end of 2021, if a corporation has five directors, the law increases that minimum number to two female directors, or if a corporation has six or more directors, the minimum number of female directors must be three.

Preventing Harassment in Professional Relationships (SB 224).  Under current Civil Code 51.9, an individual may be liable for sexual harassment that occurs in a business, service, or professional relationship when the plaintiff cannot easily terminate the relationship.  Examples of such professional relationships currently included in Civil Code section 51.9 are doctors, social workers, real estate agents, and attorneys.  SB 224 extends the list of those who may be liable for sexual harassment to include investors, elected officials, lobbyists, directors and producers.  It also eliminates the requirement that the plaintiff prove an inability to terminate the relationship, and further states that potential liability may arise where a defendant holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party.  

Salary History (AB 2282).  Last year, AB 168 prohibited employers from asking job applicants about salary history and required employers to provide a pay scale upon reasonable request to an applicant.  To address areas of confusion over the new law, AB 2282 was passed to clarify and define the terms “pay scale,” “reasonable request,” and “applicant.”  While employers have been prohibited from paying employees less than employees of the opposite sex, or employees of another race or ethnicity, AB 2282 makes clear that an employer can make compensation decisions based on an existing employee’s current salary if any wage differential is justified by one or more factors, including a seniority system, merit system, or a bona fide factor other than race or ethnicity, such as education, training, or experience.  AB 2282 also confirms that employers may ask applicants about their salary expectations. 

Criminal Background Checks (SB 1412).  Under current law, employers cannot ask an applicant to disclose information concerning a conviction that has been judicially dismissed or ordered sealed or about participating in a pretrial or posttrial diversion program.  These provisions do not apply in certain cases, including if the applicant would be required to possess or use a firearm in the course of employment, or the employer is prohibited by law from hiring an applicant who has been convicted of a crime.  SB 1412 narrows the exceptions to situations in which the employer is required by law to obtain information regarding the “particular conviction” of the applicant; the applicant would be required to possess or use a firearm in the course of employment; an individual with that particular conviction is prohibited by law from holding the position sought; and the employer is prohibited by law from hiring an applicant with that particular conviction.  A “particular conviction” is defined to mean a “conviction for specific criminal conduct or a category of criminal offenses prescribed by any federal law, federal regulation, or state law that contains requirements, exclusions, or both, expressly based on that specific criminal conduct or category of criminal offenses.”  Employers should ensure that they are complying with these criminal history limitations on the hiring process. 

Lactation Accommodation (AB 1976).  Existing law requires that employers make available a private location other than a toilet stall for an employee to express milk. AB 1976 specifies that the private location be a place other than a bathroom, when reasonable.  If the employer can demonstrate that the requirement to provide a room or location other than a bathroom would impose an “undue hardship,” the employer is required to make reasonable efforts to provide the employee with the use of a room or other location, other than a toilet stall, in close proximity to the employee’s work area.

Construction Contractor Liability for Wage and Benefit Payments to Subcontractor Employees (AB 1565).  In 2016, AB 1701 imposed on prime contractors on private works of construction liability 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.  In response, many contractors and owners revised their subcontract forms to address this significant new liability, including imposing broad disclosure obligations on subcontractors.  For contracts entered into on or after January 1, 2019, AB 1565 requires that a contract with a subcontractor identify the specific documents or information that the subcontractor will be required to produce before disputed amounts can be withheld from the lower tiered subcontractor.  Owners and contractors should review their subcontract forms to ensure that subcontractor disclosure obligations are sufficiently specific to comply with AB 1565.

Skilled and Trained Workforce (AB 3018).  Existing statutes impose skilled and trained workforce requirements on various types of construction projects by public agencies, requiring that a certain percentage of the skilled journeypersons employed to perform work on the contract or project by every contractor and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation.  The percentage in 2019 will be 50 percent and will rise to 60 percent in 2020.  AB 3018 imposes new penalties on contractors and subcontractors that fail to meet skilled and trained workforce requirements.  For initial violations, penalties up to $5,000 per month may be imposed, with a second or subsequent violation within a three-year period resulting in penalties up $10,000 per month.  A contractor or subcontractor found by the Labor Commissioner to be in violation with intent to defraud is also subject to disbarment from public works for a period of one to three years.  In the event monthly reports of skilled and trained workforce compliance are not provided as required, AB 3018 also provides that public agencies shall withhold an amount equal to 150 percent of the value of the monthly billing for the entity that failed to comply.  Owners, contractors and subcontractors with projects subject to skilled and trained workforce requirements should consider planning in advance of construction to meet the requirements since sufficiently qualified labor may be limited.

Paid Family Leave Expansion (SB 1123).  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 while caring for a seriously ill family member or to bond with a new child.  Beginning January 1, 2021, SB 1123 expands PFL by providing benefits to employees to take time off to participate in a “qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child or parent” in the United States armed forces.  These activities include attendance in a military ceremony or program, arranging for alternative child care when the active duty or call to active duty necessitates a change in child care arrangements, and attending counseling.  Human resources personnel should be prepared to properly advise employees of their PFL rights.

Reminder – Paid Family Leave Benefits (AB 904).  Last year, AB 904 amended California’s Paid Family Leave program, increasing the amount of paid family leave benefits an employee may receive from 55 percent of earnings up to 60 or 70 percent, depending on the employee’s income.  Effective January 1, 2019, AB 908 also removes the seven day waiting period before an employee may receive paid family leave benefits.  Employer human resources personnel should be advised of this change so they can continue to properly communicate with employees and coordinate PFL benefits.

Reminder – Increase in Minimum Wage.  Effective on and after January 1, 2019, the state minimum wage increases to $12.00 per hour for employers with 26 or more employees and to $11.00 per hour for employers with 25 or fewer employees.  Employers should also continue to monitor local minimum wage requirements as well.

If you have any questions regarding any of the foregoing new laws or need assistance with any labor or employee relations matter, please contact:

Dwayne McKenzie at 310.284.2279 or dmckenzie@coxcastle.com
Cathy Moses at
 949.260.4629 or cmoses@coxcastle.com

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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