2019 California Labor Law Update

The following are new labor laws in California and how you can best prepare for them. These are effective January 1, 2019 unless noted:

Law- Minimum Wage Increase: Starting January 1, 2019, minimum wage will increase to $11 per hour for employers with 25 or fewer employees, and $12 per hour for employers with 26 or more employees.

How to Prepare: Review and update pay scales, practices, and payroll as needed.

Law- Copies of Pay Statements: SB 1252 provides that employees have the right to receive a copy of their wage statements upon request. Employers may not require employees to make or pay for copies of their payroll records themselves.

How to Prepare: Employers must ensure they provide copies of wage statements, without fee, upon request of their employees.

Law- Wage Order 14: Agricultural employers with 26 or more employees must implement the first in a series of phased in overtime charges.

Currently, agricultural workers receive time-and-a-half after working 10 hours per day, or 60 hours per week. Under the new law, they will be entitled to collect overtime pay after 9.5 hours per day, or 55 hours per week.

Smaller agricultural employers, those with 25 or fewer employees, will begin phased-in overtime changes in 2022.

How to Prepare: Covered employers must review and update their pay practices and payroll as needed.

Law- Anti-Harassment Training Requirements Expanded: Governor Jerry Brown approved SB 1343 in September 2018. The law expands sexual harassment training requirements. Previously, only supervisors working for employers with 50 or more employees were required to be trained. The new law requires that both supervisors and non-supervisors working for employers with at least 5 employees be trained every two years – one hour for nonsupervisory staff, and two hours for supervisory staff.

How to Prepare: Prior to January 1, 2020, provide: (1) at least two hours of classroom or other effective training and education regarding sexual harassment prevention to supervisory employees; and (2) one hour of sexual harassment prevention training and education to nonsupervisory employees, even if training was provided in 2018. New employees must be trained within six months of hire. 

Law- Limitations on Confidentiality in Sexual Harassment Settlement Agreements: SB 820 provides that effective January 1, 2019, settlement agreements involving civil or administrative claims of sexual assault, sexual harassment, gender discrimination or retaliation may not include a non-disclosure provision regarding underlying factual allegations of the complaint. Under the Code of Civil Procedure § 1001, any such non-disclosure provisions will be deemed void as a matter of law and against public policy. 

Certain portions of settlement agreements may still remain confidential, including the amount paid in settlement of a claim. Additionally, non-disclosure agreements are permitted where the factual allegations have not been filed in civil or administrative actions, such as in a demand letter or an internal complaint.

How to Prepare: Employers should review settlement agreements to ensure they do not include non-disclosure provisions that violate the new law.

Law- Ban on Waivers of Right to Testify About Alleged Sexual Harassment or Criminal Conduct: AB 3109 adds § 1670.11 to the California Civil Code to void and make unenforceable any provision in a contract or settlement agreement, entered into after January 1, 2019, that waives a party’s right to testify regarding criminal conduct or sexual harassment. AB 3109 applies to testimony in an administrative, legislative or judicial proceeding, so long as the person’s testimony was required by the court, administrative agency, or legislative body. 

How to Prepare: Employers should review contracts and settlement agreements to ensure they do not include waiver provisions that violate the new law.

Law- Expanded Liability for Sexual Harassment in Business, Service, or Professional Relationships: SB 224 provides that “Investors, elected officials, lobbyists, directors and producers” may be held personally liable for sexual harassment in business, service, or professional relationships.

How to Prepare: Be aware of expanded personal liability.

Law- Protection from Defamation Claims: AB 2770 protects victims and employers from defamation claims related to making complaints or communicating information about alleged sexual harassers to others.

The law provides two new categories of communications protected from defamation claims. First, it protects an employee’s good faith complaints of sexual harassment to an employer based on credible evidence. Second, it protects good faith communications between an employer and interested parties regarding a sexual harassment complaint. Such communications could include those between an employer and a government agency like the DFEH or EEOC, or those between an employer and an outside investigator or potential witness.

AB 2770 also provides employers with additional protection in reference check situations, expressly authorizing an employer to answer whether it would rehire an employee and whether or not that rehire decision is based on its determination that the former employee engaged in sexual harassment. Under existing law, current or former employers are protected from defamation liability when making any statement concerning the job performance or qualifications of a person who has applied for employment elsewhere, at the request of a prospective employer or the applicant, as long as those statements are made without malice and based upon credible evidence.

How to Prepare: Be aware of added protection against defamation claims. Employers should note, however, that AB 2770 does not address communications regarding other forms of harassment, such as harassment based on race, religion, national origin, age, and other protected classifications.

Gender Representation on Boards of Directors: SB 826 provides that each publicly held corporation whose principal executive offices are in California must have at least one female on its board by the end of 2019. Depending on the board’s size, up to three female members may be required by the end of 2021, and any company that doesn’t comply would face significant financial penalties.

How to Prepare: Corporations should audit their Boards of Directors to ensure there is sufficient female representation. If no board seat opens up on an all-male board before the end of 2019, corporations must increase their authorized number of directors by one and must fill that seat with a woman.

ABC Independent Contractor Test: The California Supreme Court adopted a test to determine if an individual is an employee or independent contractor in April following its decision on Dynamex Operations West, Inc. v. Superior Court.

Under the test, to have a worker classified as a contractor, the employer must prove the following factors:

A – Is the worker free from control and direction under the contract and in fact?

B – Does the worker perform work outside the usual course of the hiring entity?

C – Is the worker customarily engaged in an independently established trade or business?

How to Prepare: Employers should review their worker classifications, 1099s, and contracts to ensure compliance.

Law- Lactation Accommodation: CA’s lactation break law has been expanded. CA employers must make reasonable efforts to provide an employee who wishes to express breast milk with the use of a room or other location, other than a bathroom, in close proximity to the employee’s work area for the employee to express milk in private for the employee’s child. Employers are also required to provide such employees a reasonable amount of break time. The break time shall, if possible, run concurrently with any break time already provided to the employee. Break time for an employee that does not run concurrently with paid rest breaks need not be paid.

How to Prepare: Review and update lactation break policies. Ensure proper accommodation and lactation locations are provided.

Human Trafficking Training for Operators of Mass Transit: By the end of 2020, businesses and establishments that operate mass transportation, such as intercity passenger rail systems, light rail systems, and bus stations, must provide their employees with at least 20 minutes of training on recognizing signs of and reporting human trafficking. 

How to Prepare: Covered employers should timely develop and provide mandated training.

Law- Human Trafficking Training for Hotel and Motel Employers: By the end of 2019, hotel and motel employers must provide at least 20 minutes of human trafficking awareness training and education to employees likely to come into contact with victims of human trafficking. After 2019, employers should provide this training once every two years.

How to Prepare: Covered employers should timely develop and provide mandated training.

Law- PAGA Relief for Unionized Construction Employees: AB 1654 provides that unionized workers in the construction industry are not covered by PAGA if their collective bargaining agreement (1) is entered into prior to January 1, 2025; (2) provides for the wages, hours or work, and working conditions of employees, premium wage rates for all overtime hours worked, and for the employee to receive a regular hourly pay rate of not less than 30% more than the state minimum wage; (3) prohibits all of the violations of the Labor Code that would normally be addressed under PAGA; (4) provides for a grievance and binding arbitration procedure to redress those violations and authorizes the arbitrator to award any and all remedies otherwise available under the Labor Code (except PAGA remedies); and (5) expressly waives PAGA rights.

How to Prepare: Covered employers should review applicable collective bargaining agreements to ensure compliance with the new law.

Law- Contractor Liability: AB 1565 clarifies last year’s Labor Code 218.7 making certain direct contractors performing work in the state liable for unpaid wages by subcontractors. For contracts entered into after January 1, 2019, in order to withhold disputed payments, the direct contractor must identify, in its contract with the subcontractor, the specific documents or information that the direct contractor will require the subcontractor to provide.

How to Prepare: Covered employers should review and update applicable contracts, as needed.

Law- Paid Family Leave Uses: Beginning January 1, 2021, the paid family leave program will be expanded to provide benefits to employees who take time off for reasons associated with being called to active duty or a spouse, domestic partner, parent, or child being called to active duty.

How to Prepare: Employers should review and update their policies and practices in time for the new law’s implementation.

Law- Criminal History of Applicants: Employers are not prohibited from asking an applicant about, or seeking from any source, information regarding a particular conviction if: (1) employers are required to obtain information regarding the particular conviction of the applicant, regardless of whether the conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation; (2) the applicant would be required to possess or use a firearm in the course of employment; (3) an individual with that particular conviction is prohibited by law from holding the position sought, regardless of whether the conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation; or (4) employers are prohibited by law from hiring an applicant who has that particular conviction, regardless of whether the conviction has been expunged, judicially ordered sealed, statutorily eradicated, or judicially dismissed following probation. 

How to Prepare: Employers should review and update applications and hiring/interviewing procedures and practices to comply with the law.

Law- Workplace Health/Safety and Workers’ Compensation: Employers’ liability for workplace injury reporting violation penalties will be extended to 5 years. The definition of “occurrence” as it relates to citations for recordkeeping purposes means citations may be issued for the entire 5 year mandatory record retention period until they are corrected or discovered by the California Division of Occupational Safety and Health, or until any recordkeeping duty is eliminated.

How to Prepare: Employers should review and update their workplace safety reporting and recordkeeping procedures as needed.