This article is Part 1 of a two-part series providing an overview of new California employment laws.

Several new laws taking effect in 2018 will affect how California employers do business.  This two-part article summarizes key changes that employers can expect and suggests ways to comply. Unless otherwise noted, these laws will take effect on January 1, 2018.

Applicant’s Salary History – AB 163

AB 163 nearly eliminates the use of an applicant’s salary history in employment decisions. The law prohibits all California employers from relying upon an applicant’s salary history information as a factor in offering employment, or the salary to offer an applicant.  California employers also will be prohibited from seeking the salary history of an applicant, directly or indirectly. Applicants may still voluntarily provide their salary history, though at the employer’s request. Even if the applicant voluntarily supplies his or her salary history, the law still prohibits the employer from using the salary history as the sole factor in creating pay disparity for a position.

Applicant’s Conviction History – AB 1008

AB 1008 changes how a California employer with five or more employees may use an applicant’s conviction history in employment decisions.

The law will specifically prohibit California employers from asking any question on a job application that seeks an applicant’s conviction history before the employer makes a conditional offer of employment.  This prohibition also extends to any other inquiry into an applicant’s conviction history before a conditional offer of employment, such as during an interview. (A “conditional” offer is “conditioned” on, for example, providing eligibility to work in the U.S., passing a reference check, or passing a background check.)

The employer may perform a criminal background check after making a conditional job offer. However, an employer may not consider or share information regarding an arrest that did not result in a conviction; referral to a pre- or post-trial diversion program; or convictions that have been sealed, dismissed, expunged or otherwise discharged.

The new law requires employers to make an individualized assessment of an applicant’s conviction history before making a final decision. The assessment is based factors related to the nature of the conviction and the job duties the applicant is expected to perform. If an employer decides to rescind a conditional offer of employment based on the applicant’s conviction history, the employer must notify the applicant in writing and provide the applicant five business days to respond.

If the employer still wishes to withdraw the conditional offer of employment after the applicant’s response to the decision, the employer must notify the applicant again in writing and provide notice of any existing procedure to challenge the final decision, as well as notice of the applicant’s right to file a complaint with the Department of Fair Employment and Housing.

Given this new law and AB 168 discussed above, It is vital that employers redesign paper or online applications, change interview scripts and procedures for setting compensation, and retrain hiring managers on this new law before its effective date.  Employers also must ensure that their background check forms and letters comply with the Fair Credit Reporting Act, existing state laws, and AB 1008.

New Parental Leave Act – SB 63

SB 63 provides job-protected leave to parents of a newborn. The law incorporates many of the provisions of the California Family Rights Act, but extends that law’s parental leave provision to employers with 20-49 employees within a 75 mile radius from the new parent’s workplace.

An employer covered by SB 63 must provide 12 weeks of job-protected leave to parents of a newborn. The employee is eligible for this leave upon working at least 1,250 hours and for the preceding 12 months for the same employer.

The leave may be taken solely due to the birth of the new child, not for any serious health conditions. The leave may also be taken any time up to one year following the birth of the child. Employers must continue group health benefits coverage for the duration of this leave and may not retaliate against employees for exercising their rights under this law.

It is important that smaller employers provide updated training to their HR professionals and managers regarding leave policies as well as updating their employee handbooks accordingly.  In addition, small employers should consider how to address the forms and letters that larger employers use to administer the federal Family Medical Leave Act and California Family Rights Act leaves.

Updated AB 1825 (Sexual Harassment) Training – SB 396

Employers required to provide mandatory AB 1825 sexual harassment training must update their training materials and training program to include subject matter on gender identity, gender expression, and sexual orientation. The training must include practical examples of harassment based on gender identity, gender expression, and sexual orientation, and the training must be provided by a trainer with knowledge and expertise in those areas.

Employers will be required to display a Department of Fair Employment and Housing authorized poster regarding transgender rights.

We will address the remainder of California’s significant new employment laws in our next article.