2012 proved to be another busy year for legislative action on employment-related matters. Governor Jerry Brown signed into law several bills that mark significant changes for California employers. Companies should prepare now to comply with these new laws (most of which become effective January 1, 2013) and adjust their practices accordingly. Below is a summary of several of the most significant new laws affecting employers.

AB 1884 Employer Use of Social Media. This law prohibits an employer from requiring or requesting an employee or applicant for employment to disclose a username or password for the purpose of accessing personal social media, to access personal social media in the presence of the employer, or to divulge any personal social media. AB 1884 also prohibits an employer from discharging, disciplining, threatening to discharge or discipline or otherwise retaliating against an employee or applicant for not complying with a request or demand by the employer that violates these provisions.

 

The law acknowledges an employer’s existing rights and obligations to 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. The law does not preclude an employer from requiring an employee to disclose a username, password or other method for the purpose of accessing an employer-issued electronic device.

 

Temporary Services Employers – AB 1744: Effective July 1, 2013, California Labor Code Section 226 will impose additional requirements on temporary services employers. There is a special exemption for certain security services companies, otherwise all employers of temporary services staff will be required to specify on an employee’s wage statement the rate of pay and total hours worked for each temporary assignment and to disclose on a new hire notice the name, physical address for the main office, mailing address (if different) and telephone number for the legal entity for which the employee will perform work.

AB 1964 Religious Dress. The law reiterates that religious dress practice or a religious grooming practice is a belief or observance covered by the protections against religious discrimination in the FEHA. An accommodation of an individual’s religious dress practice or religious grooming practice that would require that person to be segregated from the public or other employees is not a reasonable accommodation under FEHA.

 

“Religious Dress” includes 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 or her religious creed. “Religious grooming practice” includes all forms of head, facial and body hair that are part of the observance by an individual of his or her religious creed.

SB 1234 California Secure Choice Retirement Savings Trust Act. The law will require employers to enroll eligible employees into a state-run retirement plan or pension plan. All employers with more than 5 employees would be required to enroll unless they already have a qualifying plan. Employers would be required to withhold 3 percent of the employees pay. Employees would have the right to opt out.

 

The retirement plan would not take effect until a feasibility study takes place to determine if the program can pay for itself. After that study, the program would have to go back to the legislature for another vote prior to being implemented.

 

The bill requires employers to provide an opt-out form, which will be disseminated by the Employment Development Department to be used to create an option for employees to elect to opt out of the program.

 

According to the legislative analysis, the bill seeks to address a perceived dearth of retirement planning among California workers. “Of private sector workers in California, 62 percent do not participate in an employer-sponsored retirement plan, compared to 57 percent in the United States as a whole.” The problem is more prevalent in smaller businesses. “In California, 84 percent of people working for employers with 25 or fewer workers do not participate in a retirement plan at work.”

AB 2103 Overtime for Non-Exempt Salaried Employees. This law provides that payment of a fixed salary to a non-exempt employee shall be deemed to provide compensation only for the employee’s regular, non-overtime hours, notwithstanding any private agreement to the contrary. In other words, the employee must be paid additional overtime wages in addition to the fixed salary.

AB 2674 Employment Records: Right to Inspect. The law specifies that itemized wage information can be kept electronically. Further, it limits the number of requests by “employee representatives” for copies of wage records to 50 per month.

AB 2386 Breastfeeding Discrimination. The Fair Employment and Housing Act (FEHA) has been amended to cover breastfeeding. FEHA’s prohibition against sex discrimination now includes breastfeeding or medical conditions related to breastfeeding. Although breastfeeding was not previously referenced in the law, the amendment states that the changes made by this bill “are declaratory of existing law,” meaning discrimination on the basis of breastfeeding was already illegal.

 

The pressing need for this clarification is unclear, but there has been at least one published case involving breastfeeding discrimination. In the Assembly’s legislative analysis, reference was made to a June 2009 Fair Employment and Housing Commission decision in DFEH v. Acosta Tacos. In that case, the Commission found that an employer who had immediately terminated an employee after returning from pregnancy disability leave for nursing her infant during her lunchtime break, had denied the employee a right to a discrimination free work environment based on sex or pregnancy under FEHA.

SB 1381 “Mental Retardation” is now called “Intellectual Disability.” The legislature decided that the phrases “mental retardation” and “mentally retarded” as used in the law is an “outdated, offensive and misleading term.” Government Code Section 12926(j) now reads: “Mental disability” includes, but is not limited to, all of the following: (1) Having a mental or psychological disorder or condition, including an intellectual disability, organic brain syndrome, emotional or mental illness or specific learning disabilities that limits a major life activity.

AB 1775 Wage Garnishment Minimum Withholding. This new law increases the so-called “garnishment floor” in California. It increases the minimum amount of an employee judgment debtor’s weekly earnings that are exempt from wage garnishment as a matter of law. Currently, California law conforms with federal law in establishing this amount at 30 times the federal minimum wage. This new law breaks California’s mirror with federal law and increases this amount in California law to 40 times the California minimum wage. Because the current federal minimum wage is $7.25/hour and the current California minimum wage is $8.00/hour, this bill would effectively increase the garnishment floor in California from $217.50 (i.e. 30 x $7.25) to $320 (i.e. 40 x $8.00).

This is a second recent change in California wage garnishment law. Last year, AB 1388 added other California wage garnishment exemptions for valid debt for necessaries of life, such as medical care.

Elimination of the Fair Employment and Housing Commission. Passed in response to California’s budget crisis, SB 1038 eliminates the Fair Employment and Housing commission, the quasi-judicial administrative agency that previously enforced the FEHA. The new law puts an end to administrative adjudication of FEHA claims, replacing the Fair Employment and Housing Commission with a Fair Employment and Housing Council with the Department of Fair Employment and Housing (DFEH). The new Council will have seven Governor-appointed members, who will promulgate rules and hold public hearings.

 

The DFEH may now enforce the FEHA directly in court, although the DFEH will require all parties to undergo free dispute resolution through its Dispute Resolution Division prior to initiating any civil litigation. Courts may award reasonable attorneys’ fees and costs to the DFEH under the new law.

Enhanced Protection for Whistleblowers. The California False Claims Act (CFCA) protects employees who oppose ore report false claims made by their employers in connection with goods or services provided to state or local governments. AB 2492 makes a number of changes to the CFCA designed to conform to the federal False Claims Act. Specifically, it expands the definition of a false claim, amends the statute of limitations, permits recovery of attorneys’ fees in more cases and adds contractors and agents to the list of individuals who may pursue such claims, all consistent with the federal statute. The new law also increases civil penalties by 10 percent, such that penalties for a single false claim now range from $5,500 to $11,000.

Employers are encouraged to review their employment policies and procedures to ensure that they are up to date in light of this new legislation. It is advisable to consult with professionals to make certain that any policies or procedural changes are consistent with the new California laws.