Several of the new employment laws taking effect on January 1, 2018, require employers to change policies, forms, and procedures. Below is a non-exhaustive summary of key updates to employment documents, notices and postings, policies and employee handbooks, internal processes, and training programs. This list may not take into account special exceptions contained in the laws. It also is not legal advice tailored to your organization’s particular situation.
Employment Documents. Most employers must update their employment applications to comply with several new mandates. Employers must remove questions that require an applicant to disclose their criminal history (AB 1008) or salary history (AB 168). Employers should also remove any questions that require disclosure of sex or gender, per the Department of Fair Employment and Housing’s (“DFEH”) new “Regulations Regarding Transgender Identity and Expression.”
The federal Fair Credit Reporting Act (“FCRA”) mandates that background check disclosure documents consist “solely” of the disclosure. In Syed v. M-I, LLC, the Ninth Circuit held that including a liability waiver in a background check disclosure violates the FCRA. Employers should review their background check disclosure to ensure it is a standalone document, and insist on customizing a third party agency’s documents.
The U.S. Citizenship and Immigration Services revised the Form I-9, which is used by employers to verify employment eligibility. As of September 18, 2017, employers must use the form dated “07/17/2017.”
The Internal Revenue Service just released the 2018 standard mileage rate, used for reimbursement of employees’ use of their personal vehicle. The new rate is $0.545, a $0.01 increase from 2017’s rate. Employers should update expense reimbursement documents to reflect the new reimbursement rate.
AB 1701 makes a direct contractor jointly liable for wage claims against a subcontractor. Direct contractors should negotiate indemnification provisions regarding wage and hour compliance to subcontractor agreements. It is also important for contractors to perform due diligence on subcontractors to help prevent wage and hour liability.
State and federal courts decided several cases in 2017 involving arbitration agreements. Employers should consult competent legal counsel about appropriate revisions to any arbitration agreements they require employees to sign.
Notices and Postings. The California Department of Labor Standards Enforcement issued a new notice entitled “Rights of Victims of Domestic Violence, Sexual Assault and Stalking.” Employers must provide a copy of this notice to employees upon hire and at any time upon request.
Employers should ensure they are displaying the current version of all required posters. The DFEH revised several mandatory posters in 2017, including posters regarding workplace discrimination and harassment (DFEH-E07P), sexual harassment (DFEH-185), family care and medical leave (DFEH-100-21), and pregnant employee rights (DFEH-E09P). The DFEH also created a new mandatory poster, “Transgender Rights in the Workplace” (DFEH-E04P).
Employers are also required to post the current version of applicable Industrial Welfare Commission wage orders. The Department of Industrial Relations updated most of the wage orders in 2017. Employers should note the wage orders still read 1-2001, 2-2001, etc., but the date of the update may be listed on the bottom.
Employer Policies/Employee Handbooks. Several new laws require employers to create or update certain policies. Employee handbooks should be updated to reflect the new or altered policies.
Employers should make dress code, grooming, and appearance policies gender-neutral to comply with the DFEH transgender regulations.
SB 63 requires employers with 20-49 employees to allow employees 12 weeks of leave to bond with a new child. Affected employers must create or update their leave policies to comply with the new law.
Employers should update rest period policies to clarify that rest periods are duty-free and remove any requirement that employees remain on the premises. In Augustus v. ABM Security Services, Inc., the California Supreme Court held that requiring employees to remain “on call” or carry a pager or radio during rest periods violates the California Labor Code and Wage Orders. Rather, employers must “relieve their employees of all duties and relinquish any control over how employees spend their break time.”
Employers should ensure their employee handbook clearly defines the workday and workweek. In Mendoza v. Nordstrom, Inc., the California Supreme Court clarified that employees are entitled to one day of rest in each seven-day workweek, but employers are entitled to define the workweek.
Internal processes. Employers must create new internal processes to manage requirements in several new laws.
AB 1008 contains specific requirements for employers to notify an applicant for employment that a conditional offer of employment may be withdrawn based on the applicant’s criminal history. Employers should create a process to perform the required individualized assessment of the criminal history and job requirements, and to provide the required preliminary and final notifications to the applicant.
AB 168 requires employers to provide the pay scale for a position to a job applicant “upon reasonable request.” Employers should create a process to respond consistently to such requests, including development of a “pay scale” for those employers who do not use one.
AB 450 requires employers to notify current employees within 72 hours of receiving notice of an I-9 inspection, and to notify “affected employees” of any obligations arising from the results of the I-9 inspection within 72 hours of receiving the results. Employers should create a process to provide these required notices.
Employers with 20-49 employees should create processes for requesting, administering, and tracking parental leave. Consider creating a “New Parent” packet of information and forms to provide employees upon request.
Employers should review exempt employees’ salaries to ensure these salaries qualify for the exemption. In California, exempt employees under the professional, executive, and administrative exemptions must be paid at least two times the state minimum wage, which is increasing to $11.00/hour for employers with 26 or more employees and $10.50/hour for employers with 25 or fewer employees. On January 1, 2018, the minimum annual salary for the computer software employee exemption increases to $90,790.07 (or $43.58/hour) from the 2017 rate of $88, 231.36 (or $42.35/hour).
Training Programs. SB 396 requires employers with 50 or more employees to update their mandatory biennial sexual harassment training for supervisory employees to include practical examples of harassment based on gender identity, gender expression, and sexual orientation.
Although not required by law, employers should also consider additional training on several legal developments in 2017. Human resources professionals should receive training on administering parental leave (SB 63), responding to visits from immigration enforcement agents (AB 450), and conducting workplace investigations (DFEH “Workplace Harassment Guide”). Supervisors, managers and human resources professionals should receive training on prohibited interview questions (e.g., criminal history, salary history, and gender), and responding to harassment complaints. Two cases this year (Reynaga v. Roseburg Forest Products and Fuller v. Idaho Department of Corrections) highlighted how the employer’s response to a complaint can create liability for a hostile work environment.