This article is Part 1 of a two-part series providing an overview of new federal and California employment laws.
Several new laws taking effect in 2014 will significantly change the practices of California employers. This article summarizes them and includes tips on how to comply. The bills become law on January 1, 2014, unless otherwise noted.
Wage and Hour
Minimum Wage Law – AB 10
Effective July 1, 2014, California’s minimum wage will increase from $8.00 to $9.00 per hour. It will increase again, to $10.00 per hour, on January 1, 2016. The increases will change the minimum salaries for exempt employees, which must be at least two times the state’s minimum wage to satisfy the requirements of most exemptions. Employers paying workers minimum wage should note that the increased minimum will also affect split-shift premiums, meal and rest period penalties, and other payments based on minimum wage.
Overtime for “Personal Attendants” – AB 241
AB 241 requires employers to pay “personal attendants” overtime for work over nine hours in a workday or 45 hours in a workweek. They remain exempt from other California Labor Code requirements, such as meal periods and rest breaks. The law contains specific definitions regarding who qualifies as “personal attendants” and carves out several exceptions. In general, though, “personal attendants” are employed by a household or third-party recognized in the health care industry to work in households supervising, feeding, or dressing elderly, disabled individuals, and/or children. The new overtime requirements remain in effect until January 1, 2017. Employers of personal attendants must pay careful attention to changes in federal law as well.
Wage Withholdings – SB 390
Employers who willfully fail to remit required withholdings in the amount of $500 or more from employees’ wages to health and welfare funds, pension funds, or various benefit plans will face a criminal misdemeanor charge and/or fine of up to $1,000.
Prevailing Wage – SB 54 and AB 1336
Employers performing government contract work and others must pay “prevailing wages,” as determined by the state’s Department of Industrial Relations. SB 54 requires owners and operators of private “stationary sources” that are subject to the Office of Emergency Services’ accidental release prevention program and required to prepare “risk management plans” to pay prevailing wages.
AB 1336 expands the deadline for joint labor-management committees, which are authorized to bring actions against employers who fail to pay prevailing wages, from 180 days to three years. The bill also requires employers to delete all but the last four digits of an employee’s social security number on payroll records made available to joint labor-management committees.
Public Works – SB 377
This bill requires the Department of Industrial Relations (DIR) to determine whether a project is a “public work” within 60 days of receipt of the last support or opposition letter relating to the project, and for projects that are otherwise private projects receiving public funds, within 120 days of receipt. Employers may file an appeal within 30 days of the DIR’s determination. The DIR has 120 days to rule on the appeal.
Meal and Recovery Periods – SB 435
SB 435 amends Labor Code section 226.7 to extend the concept of missed meal and rest break premiums to “recovery periods,” mandated by various regulations designed to prevent heat illness. Under the new law, employers must pay a one-hour wage premium for missed or denied recovery periods.
Attorneys’ Fees in Wage Claims – SB 462
Labor Code section 218.5 previously permitted either the employee or employer to seek attorneys’ fees as the prevailing party in certain wage claims. The revised statute allows employers to obtain fees only if the court determines the lawsuit was brought in “bad faith.”
SB 496 – The “California Whistle Blower Protection Act”
The “California Whistleblower Protection Act” prohibits retaliation against a state employee who made a protected disclosure regarding improper governmental activity. The Act creates an exception to the pre-lawsuit procedures outlined in California’s Government Tort Claims Act, which requires employees to first submit an administrative claim before filing a lawsuit.
AB 263 – Retaliation and “Immigration-Related Practices”
This bill expands the scope of “protected activity,” an essential part of a retaliation claim. The bill permits retaliation lawsuits based on a worker’s complaint that he or she is owed unpaid wages. It also adds “retaliation” and “taking adverse action” to an existing list of prohibited conduct against employees or job applicants who engage in protected activities. Employees will not be required to exhaust administrative remedies under Labor Code section 98.7 before filing a retaliation lawsuit.
This bill also protects employees from “unfair immigration-related practices,” including improperly using the E-Verify system to check someone’s employment authorization status and threatening to contact immigrations authorities, among other prohibited practices.
Both SB 496 and SB 263 expand the scope of Labor Code section 1102.5 by making it unlawful for employers to prevent employees from disclosing information to government or law enforcement agencies that employees reasonably believe violates law, including local rules or regulations. The law also expands anti-retaliation protection to employees whose job it is to inform management of potential legal issues, such as human resource managers, auditors, and internal investigators.
In our next column, we will review additional developments for 2014.