5 Employment Laws Calif. Businesses Should
Know In 2015

Law360, January 23, 2015

The California Legislature recently enacted a number of wide-ranging employment laws that will affect California businesses in 2015, including expanded discrimination protections to interns and protections for undocumented persons who are issued driver’s licenses, required anti-bullying training, an increase in the computer professional overtime exemption minimum and a codified joint employer liability. Employers should review their handbooks and other policies and update them accordingly. Below are five of the new laws that take effect in 2015.

1. Mandatory Paid Sick Leave
The most notable new law is AB 1522, which makes California the second state in the nation requiring employers to provide paid sick leave to employees. The Healthy Workplaces, Healthy Families Act of 2014, which takes effect on July 1, 2015, requires employers to give at least three paid sick days (24 hours) each year to each employee who works more than 30 days in California. All employers are covered by the new law — public and private, large and small, for-profit and nonprofit. All employees must be given the sick leave, including temporary, part-time, seasonal employees and out-of-state employees who work more than 30 days in California. The law provides employers with two options for providing sick leave: the accrual method or the lump-sum method.

Under the accrual method, employees earn paid sick leave at a rate of one hour for every 30 hours worked, including both regular and overtime hours. An employer may cap sick leave accrual at six days (48 hours), but can limit an employee’s use of paid sick leave to three days (24 hours) per year. Employees must be able to carry over any accrued but unused sick time from year to year, but such accrued time does not have to be paid out at separation.

Under the lump-sum method, employees must be given at least three days (24 hours) of paid sick leave at the beginning of the year. Carryover of unused sick leave to the following year is not required under the lump-sum method as employees receive three new sick leave days at the start of each year. Thus, the lump-sum method lessens the administrative burden on employers to track accrual and carryover requirements.

Employers that have existing policies that provide paid sick leave are not required to provide additional paid time off if the existing policy allows use of paid sick leave for all of the same purposes and under the same conditions outlined by the new law and the policy either: (1) satisfies the accrual, carryover and use requirements of the new law or (2) provides no less than three days (24 hours) of paid sick leave, or equivalent paid leave or paid time off, for employee use for each year of employment or calendar year, or on a 12-month basis.

A number of unanswered questions remain. For example, it is not clear whether employers may continue to request documentation that sick time has been used for a covered purpose, especially for any time taken after employees have used their three days allowed by law. Although the new law states that an employee may not be terminated or retaliated against for using or requesting the use of accrued sick leave, it is silent about whether employers may require medical documentation from an employee to justify use of paid sick leave. The Federal Family Medical Leave Act and the California Family Rights Act require such medical documentation for medical absences. Employers should consult counsel before requiring documentation of illnesses or deciding between the accrual or lump-sum method.

2. Extension of Discrimination and Harassment Protections to Unpaid Interns and Volunteers
AB 1443 amends the California Fair Employment and Housing Act to add unpaid interns and volunteers to the list of individuals protected from harassment and discrimination. Specifically, the bill amends Government Code Section 12940(c), which currently prohibits discrimination in apprentice training programs, to also preclude discrimination against interns and volunteers on the basis of any legally protected classification (e.g., age, race, gender, disability, etc.), prohibit sexual harassment of them and extend rights to religious belief accommodation requirements to them. Employers should revise their policies to include protections for unpaid interns and volunteers.

3. Expansion of Immigration-Related Protections
This bill amends Labor Code Section 1019 to provide further protection to employees who exercised their rights under state labor and employment laws. The new law makes it unlawful for any employer to threaten to file or file a false report with any state or federal agency, not just the police or immigration authorities. An employer that violates this provision can be subjected to a $10,000 penalty for each violation. AB 2751 also makes changes to Labor Code Section 1024.6 to clarify that employers may not discriminate or retaliate against employees who update their personal information “based on a lawful change of name, Social Security number or federal employment authorization document.”

Thus, employers will be faced with walking the fine line between this new law and federal laws such as the Immigration and Nationality Act, which prohibits knowingly employing an unauthorized worker. (8 U.S.C. § 1324b.) Efforts to comply with one obligation often puts employers at risk of violating other laws. Employers should seek advice from counsel before taking any potentially adverse employment actions against employees who are known or reasonably believed to be unauthorized workers.

4. Driver’s Licenses for Undocumented Persons
Under AB 60, a bill passed in 2013, California began issuing driver’s licenses on Jan. 1, 2015, to undocumented persons who are able to submit satisfactory proof of identity and California residence. These licenses are often referred to as “AB 60 driver’s licenses” after last year’s bill that authorized them. AB 60 made it a violation of law to discriminate against persons who hold such licenses.

AB 1660, passed in 2014, will expand protections for holders of AB 60 driver’s licenses. The bill amends FEHA to specify that discrimination on the basis of national origin includes discrimination against individuals because they hold such licenses. However, the law specifically clarifies that an employer’s actions to comply with federal I-9 verification requirements do not violate California law.

5. Increased Liability for Employers that Contract for Labor
Employers who contract for labor (“client employer”) through staffing or other labor contractors will be responsible for wage-and-hour violations committed by the staffing agencies or other labor contractor for the employees supplied to the client employer. AB 1897 defines client employer as “a business entity, regardless of its form, that obtains or is provided workers to perform labor within its usual course of business from a labor contractor.”

The definition of client employer does not include companies with less than 25 workers, companies with five or fewer workers supplied by a labor contractor at any given time and the state or any political subdivision of the state. The new law does not prohibit a client employer from contracting for indemnification from the labor contractor for the labor contractor’s failure to pay wages or obtain workers’ compensation coverage. Employers that contract for labor should review their contracts with any companies through which they hire contract labor. Employers might also consider asking labor contractors for records showing payment of wages and proof of worker’s compensation insurance.