FELS.net - Legislation Signed into Law eff 01/12

Legislation Signed Into Law by Governor Brown

The Governor has been busy reviewing 870 bills the legislature sent him since August. The Governor had until October 9th to take action on those bills. Governor Brown signed 745 of the bills and vetoed 125.

The following are bills signed into law that will take effect in 2012. Except where noted otherwise, all of these bills will take effect on January 1, 2012.:

California Legislation Enacted in 2011

Employment-related Credit Checks

Employers currently may request a consumer credit report for purposes of evaluating an applicant or employee for employment, reassignment, or retention. AB 22 prohibits an employer or prospective employer from obtaining a consumer credit reports unless the person for whom the report is sought has (or will have) a position that is:

managerial;
one for which the information contained in the report is required by law to be disclosed or obtained;
one that involves regular access, for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, to someone's bank or credit card account information, social security number, and date of birth;
one in which the person is, or would be, any of the following:

(1) a named signatory on the bank or credit card account of the employer;

(2) authorized to transfer money on behalf of the employer; or

(3) authorized to enter into financial contracts on behalf of the employer;

one that involves access to certain confidential or proprietary information; or
one that involves regular access to cash totaling $10,000 or more of the employer, a customer, or client, during the workday.

An employer seeking a credit report must give notice to the person on whom the report is sought and the source of the report. This notice must allow the person to receive a copy of the credit report. In addition to these requirements, an employer will have to identify which of the position categories named above the employer believes applies to the position in question.

If an adverse action is taken based on the credit report, the employer must give the applicant or employee written notice of the adverse action along with the name and address of the credit reporting agency which provided the credit report.

In the event an employer fails to comply with the new law, applicants or employees may bring individual suits for damages, including court costs, loss of wages, attorneys' fees, and when applicable, pain and suffering. In addition, courts can award additional damages up to $5,000 for each violation and any other relief it deems necessary.

Workers’ Compensation Coverage for Out-of-State Injuries

California employers insured by State Compensation Insurance Fund now must obtain a separate workers' compensation policy to cover their employees who work out of state other than temporarily. AB 228 will let State Fund provide workers' compensation coverage to a California-based employer for all of its employees regardless of whether they work in or out of California.

Wage Theft Prevention Act of 2011

Click here for template and additional information regarding LC 2810.5

AB 469 and AB 243 amended and added several provisions to the California Labor Code:

· Strengthens the Labor Commissioner’s ability to recover wages, penalties and damages on behalf of employees.

· Requires farm labor contractors to disclose to each employee in an itemized wage statement the name and address of farmers or ranchers securing the contractor's services.

· Permits an employee to recover attorneys' fees and costs incurred in enforcing a court judgment for unpaid wages due.

· Requires an employer to pay restitution to an employee, in addition to civil penalties, if the employer pays the employee less than minimum wage.

· Creates a new misdemeanor for an employer who willfully fails to pay but has the ability to pay a final court judgment or final order issued by the Labor Commissioner for all wages due. The employer is subject to fines between $1,000 and $20,000, and possible jail time.

· Requires employers to provide each non-exempt employee at the time of hiring (and thereafter with notice of changes to the information) of (click here for Labor Code Sec. 2810.5):

· the rate or rates of pay and the basis for that pay (hour, shift, day, week, salary, piece, commission or otherwise, including any rates for overtime);

· allowances, if any, claimed as part of the minimum wage, including meal or lodging allowances;

· the regular payday;

· the name of the employer, including any fictitious business name(s);

· the physical address of the employer's main office or principal place of business, and a mailing address, if different;

· the telephone number of the employer;

· the name, address and telephone number of the employer's workers' compensation insurance carrier; and,

· any other information the Labor Commissioner deems material and necessary.

Click here for template and additional information regarding LC 2810.5

Revisions to Maternity Leave Laws

AB 592 defines a refusal to allow employees to take pregnancy disability leave or family medical leave as discrimination under state anti-discrimination laws, makes it an unlawful employment practice for an employer to interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right provided under the Pregnancy Disability Leave law and the California Family Rights Act.

SB 299 requires an employer to maintain and pay for coverage under a group health plan for an employee on maternity leave.

SB 222 and AB 210 (effective July 1, 2012) ensure access to comprehensive maternity health coverage by requiring group health care policies and individualized health insurance plans to provide maternity coverage.

Organ Donor and Bone-Marrow Donor Leave Law Revisions

AB 272 requires employers to grant a leave of absence of up to 30 business days in a one-year period to an employee who is an organ donor, and up to five business days for a bone-marrow donor. The one-year period is measured from the date the employee's leave begins and consists of 12 consecutive months. The leave of absence for a donor is not a break in continuous service for the purpose of salary adjustments, sick leave, vacation, annual leave, or seniority. As a condition of an employee's initial receipt of the leave of absence, an employer may require a bone-marrow donor to use up to five days of accrued paid time off, and an organ donor up to two weeks of accrued paid time off.

Gender Expression added to Anti-discrimination Law

AB 887 revises the definition of gender in the Fair Employment and Housing Act, making clear that discrimination on the basis of gender identity and gender expression is prohibited. Gender expression means a person's gender-related appearance and behavior whether or not stereotypically associated with the person's assigned sex at birth. This amendment is retroactive because it is clarifies rather than changes the law.

Same Health Benefits Regardless of Sex

Under current California law, a health care service plan and a health insurance policy must provide group coverage to the registered domestic partner of an employee, subscriber, insured, or policyholder that is equal to the coverage it provides to the spouse of those persons.

AB 757 provides that a health care service plan or a health insurance policy may not discriminate in coverage between spouses or domestic partners of a different sex and spouses or domestic partners of the same sex. Moreover, it states that all group health care service plans that are marketed, issued, or delivered in California must comply with California's non-discrimination requirements.

Written Commission Agreements

Effective January 1, 2013, AB 1396 will require that all employment relationships involving the payment of commissions shall be in writing and shall set forth the method by which the commissions shall be computed and paid. Commissions are defined as compensation paid to any person in connection with the sale of the employer's property or services and based proportionately upon the amount or value thereof. Commissions do not include short-term productivity bonuses or payments under bonus plans or profit-sharing plans, unless based on an employer's promise to pay a fixed percentage of sales or profits as compensation.

An employer must give a signed copy of the contract to every employee paid through a commission agreement and obtain a signed receipt for each contract. The contract terms are presumed to remain in full force and effect until the contract is superseded or the employment relationship ends. Failure to comply will subject an employer to an action for penalties of $100 per pay period per aggrieved employee under the Private Attorneys General Act.

For more information click here.

ALRB and Ag Unionization

Employers of agricultural employees are prohibited from engaging in unfair labor practices, including interfering in an election by agricultural employees for labor representatives to engage in collective bargaining for designated bargaining units.

Under SB 126, if the ALRB sets aside a representation election due to employer misconduct that affected the election’s results, the ALRB would nonetheless certify the union to represent the employer’s agricultural employees if the employer’s misconduct would render slight the chances of a new election reflecting the free and fair choice of employees.

SB 126 also imposes time limits for challenging election results and establishes shorter timeframes for mandatory mediation (really, compulsory interest arbitration) when an agricultural employer and a union representing the employer’s agricultural employees fail to reach a collective bargaining agreement.

SB 126 also specifies that, when ruling on a petition by the ALRB for appropriate temporary relief or a restraining order concerning an alleged unfair labor practice, a court must consider whether the alleged unfair labor practice, by its nature, would interfere with employees' free choice to choose an exclusive bargaining representative, and whether reasonable cause exists to believe that the unfair labor practice has occurred. If so, the court shall issue appropriate temporary relief or a restraining order. The order will remain in effect until an election has been held or for 30 days, whichever occurs first, and the temporary relief or restraining order will not be stayed pending an appeal. Click here for more information.

Misclassification of Independent Contractors

SB 459 prohibits willful misclassification of an employee as an independent contractor by a consultant or an employer, and it prohibits charging misclassified individuals a fee, or taking a deduction from their compensation, that would violate the law had the individual been classified as an employee. A willful misclassification occurs when an employer avoids employee status for an individual by voluntarily and knowingly misclassifying that individual as an independent contractor.

A violation may result in the California Labor and Workforce Development Agency (LWDA) or a court imposing civil penalties between $5,000 and $15,000 for each violation, and $10,000 to $25,000 for a pattern and practice of violations. A non-lawyer who advises an employer to misclassify a worker may be held jointly and severally liable with the offending employer.

SB 459 also requires public notification of violations. Specifically, a person or employer who willfully misclassifies a worker as an independent contractor must prominently display for one year on its website (or if the person or employer does not have a website, in an area that is accessible to all employees and the general public) a notice stating:

· it committed a serious violation of the law by engaging in the willful misclassification of employees;

· it has changed its business practices to avoid further violations;

· that an employee who believes he or she is being misclassified may contact the LWDA (whose contact information must be included); and

· that the notice is being posted pursuant to a state order.

For more information click here.

Genetic Information as a Protected Category

AB 559 prohibits discrimination under the Unruh Civil Rights Act and the Fair Employment and Housing Act on the basis of genetic information. Genetic information means information about an individual's genetic tests, the genetic tests of family members of the individual, or the manifestation of a disease or disorder in family members of the individual. Genetic information also includes any request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by an individual or any family member of the individual.

Electronic Employment Verification

AB 1236 prohibits the state, or a city, county, or special district, from requiring private employers to use to use E-Verify or any other electronic employment verification system, unless it is required by federal law or as a condition of receiving federal funds.

Carbon Monoxide AB 634 (Alyson Huber, D-El Dorado Hills) will legalize the use of carbon monoxide to control burrowing rodent pests. Farm Bureau sponsored this bill to allow an additional pest control tool for California's farmers and ranchers. The bill requires carbon monoxide delivery devices to include a warning label reminding users of the risks of carbon monoxide and of the prohibition on killing threatened and endangered species. The bill also allows CDFA's Vertebrate Pest Control Research Advisory Committee to create educational materials on the safe and effective use of carbon monoxide for rodent control.

Vetoed Legislation: Governor Brown vetoed 15 percent of the bills sent to him since August, including the following:

Workers Compensation-compensable AB 1155 (Luis Alejo, D-Salinas) would have undermined the effectiveness of apportionment to determine degree of impairment caused by a workers compensation-compensable injury by prohibiting race or any other protected classification being considered in an apportionment decision. Since such discrimination has already been prohibited by the courts, AB 1155 would invite litigation on a settled matter of public policy and drive up employers' costs of both workers compensation and permanent disability. Farm Bureau and many employers' organizations opposed AB 1155. The Governor's veto message said "This bill would, however, generate new litigation over questions of whether it is intended to change existing interpretations. At best, that additional litigation would add to employers' costs for workers' compensation. At worst, this bill could disturb the appropriate interpretation of existing law that is already taking shape in the courts."

Payroll Cards SB 931 by Noreen Evens (D-Santa Rosa) was amended with language from the stalled AB 51 payroll cards bill. SB 931 moved quickly through the legislative process at the end of the session. The Governor's veto message said, "This bill seeks to contain costs for workers who choose to accept pay cards, a goal with which I agree. Unfortunately, this bill goes too far. It would impose numerous and costly new requirements on pay card providers. A likely result of these mandates is that banks and employers may simply stop offering this service, injuring the very workers this bill aims to protect." Farm Bureau opposed SB 931.

AB 6 (Felipe Fuentes, D-Los Angeles) improves access to CalFresh, California’s “food stamp” program, by streamlining the reporting requirements, implementing cost saving measures to fraud prevention efforts, and implementing a “heat and eat” provision that increases access to additional federal funding. These process improvements will lead to approximately $8.7 billion in additional economic activity. Farm Bureau supported AB 6 (Fuentes).

Excerpt from California Labor Code regarding written notice requirment:

  SEC. 12.  Section 2810.5 is added to the Labor Code, to read:
   2810.5.  (a) (1) At the time of hiring, an employer shall provide
each employee a written notice, in the language the employer normally
uses to communicate employment-related information to the employee,
containing the following information:
   (A) The rate or rates of pay and basis thereof, whether paid by
the hour, shift, day, week, salary, piece, commission, or otherwise,
including any rates for overtime, as applicable.
   (B) Allowances, if any, claimed as part of the minimum wage,
including meal or lodging allowances.
   (C) The regular payday designated by the employer in accordance
with the requirements of this code.
   (D) The name of the employer, including any "doing business as"
names used by the employer.
   (E) The physical address of the employer's main office or
principal place of business, and a mailing address, if different.
   (F) The telephone number of the employer.
   (G) The name, address, and telephone number of the employer's
workers' compensation insurance carrier.
   (H) Any other information the Labor Commissioner deems material
and necessary.
   (2) The Labor Commissioner shall prepare a template that complies
with the requirements of paragraph (1). The template shall be made
available to employers in such manner as determined by the Labor
Commissioner.
   (b) An employer shall notify his or her employees in writing of
any changes to the information set forth in the notice within seven
calendar days after the time of the changes, unless one of the
following applies:
   (1) All changes are reflected on a timely wage statement furnished
in accordance with Section 226.
   (2) Notice of all changes is provided in another writing required
by law within seven days of the changes.
   (c) For purposes of this section, "employee" does not include any
of the following:
   (1) An employee directly employed by the state or any political
subdivision thereof, including any city, county, city and county, or
special district.
   (2) An employee who is exempt from the payment of overtime wages
by statute or the wage orders of the Industrial Welfare Commission.
   (3) An employee who is covered by a valid collective bargaining
agreement if the agreement expressly provides for the wages, hours of
work, and working conditions of the employee, and if the agreement
provides premium wage rates for all overtime hours worked and a
regular hourly rate of pay for those employees of not less than 30
percent more than the state minimum wage.