This article is Part 2 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.

Immigration Enforcement at the Worksite – AB 450

AB 450 creates new obligations for employers federal immigration enforcement agents inspect or investigate the work place..  Employers will be prohibited from voluntarily providing access to a federal immigration enforcement agent to any non-public areas of the work site, if the agent does not have a warrant. Employers will also be prohibited from voluntarily providing an immigration enforcement agent access to employee records without a subpoena, warrant, or Notice of Inspection (NOI) of Employment Eligibility Verification Form I-9s, and other records required to be maintained under federal immigration regulations. That is, employers cannot do more than federal law compels them to do.  Over-cooperation with federal authorities may violate California law.

Within 72 hours of receiving a NOI, an employer will be required to post a notice communicating that an immigration agency will conduct inspections of I-9s and other forms; the date the NOI was received; and the known extent of the inspection.

An employer will now be required to provide notice to any employee who appears to lack work eligibility after the inspection within 72 hours of receipt from the immigration enforcement agency of a Notice of Suspect Documents. The notice must inform the affected employee of the deficiencies identified in the employee’s records; the time and date of the meeting with the employer to correct the deficiencies; and that the affected employee has the right to representation during the meeting with the employer.

Employers may not re-verify the employment eligibility of a current employee if doing so is not required by the Immigration Reform and Control Act of 1986, or in violation of any E-Verify Memorandum of Understanding entered into with the Dept. of Homeland Security.

An employer found violating provisions of this new law may face penalties ranging from $2,000 to $10,000. Employers should train management, particularly those responsible for government compliance, how to respond to immigration enforcement agents. Training should include a demonstration of the types of documents the enforcement agents are required to produce before being granted access.  Employers also must develop the new notices required.

Direct Contractor and Subcontractor Joint Liability for Unpaid Wages and Benefits – AB 1701

AB 1701 creates new wage and benefits potential liability for any direct contractor for the erection, construction, alteration, or repair of a building, structure, or other private work, entered into on, or after, January 1, 2018. A direct contractor will be liable for any unpaid wages, fringe or other benefit payments, and interest owed to employees of any subcontractor who contracts with the direct contractor.

The Labor Commissioner, or an interested third party such as the employee’s union, may bring an action to recover these payments from the direct contractor. The subcontractor’s employee may not bring a claim or suit directly.

Direct contractors now have the right to request from subcontractors their employees’ wage statements pursuant to Labor Code section 226, and payroll records maintained pursuant to Labor Code section 1174. A direct contractor may withhold, as “disputed,” all sums owed to a subcontractor until the information is provided.

Direct contractors should try to execute all pending subcontractor agreements before January 1, 2018 to avoid liability under this new law. For all contracts executed on or after, January 1, 2018, the direct contractor should include assurance and indemnification provisions regarding wage and hour compliance and should routinely inspect subcontractor records to ensure compliance and avoid liability.  

Prohibited Discrimination Against Military Service Members – AB 1710

AB 1710 updates existing law regarding prohibited discrimination against active military members by prohibiting the impairment of the terms, conditions, and privileges of the military member’s employment in a civilian job as a result of the employee’s military status, or participation in military activities.

This is an important opportunity to refresh management regarding prohibitions against making employment decisions based an employee’s protected status as a member of the military forces of the state of California or the United States.

Expansion of Labor Commissioner’s Investigative Authority – SB 306          

SB 306 expands the Labor Commissioner’s authority to commence an investigation into discrimination or retaliation in violation of any law under the Labor Commissioner’s jurisdiction – generally violations of the California Labor Code pertaining to wages. The Labor Commissioner will now be able to commence an investigation without receiving a complaint, if the Commissioner suspects discrimination or retaliation while adjudicating a wage claim or performing a field inspection.

The Labor Commissioner is now authorized to reinstate an employee pending resolution of the wage claim based upon a finding of “reasonable cause,” as well as issue citations for monetary or other relief after finding violations of law without going through the court system.

An employee reinstated by the Labor Commissioner pursuant to this expansion of authority may still be disciplined or terminated for reasons unrelated to the retaliation claim.   But employers should anticipate additional scrutiny for taking negative action against a reinstated employee.