New Laws Effective January 1, 2018

This past week, Governor Brown signed into law several more employee-friendly bills.  Unfortunately, none of the bills are helpful for California employers.  Here are the new laws effective January 1, 2018.

AB 1008 (Ban the Box):  Effective January 1, 2018, this new law amends the California Fair Employment and Housing Act to prohibit employers with 5 or more employees from inquiring about criminal history on an employment application and/or at any time (including the interview process) prior to making a conditional offer of employment.  This law also requires an employer who intends to deny an applicant a position of employment solely or in part because of the applicant’s conviction history to make an individualized assessment of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job sought, considering the nature and gravity of the offense, the amount of time that has passed, and the nature and duties of the job sought by the applicant.  An employer who makes a preliminary decision to deny employment based on that individualized assessment must provide the applicant a written notification of the preliminary decision that identifies the disqualifying conviction(s) and informs the applicant that he or she may provide a response that includes evidence challenging the accuracy of the conviction information and/or demonstrating rehabilitation or other mitigating circumstances. The employer also must provide a copy of the conviction history report, if any. (The employer may, but is not required to, explain or justify the reasoning for its preliminary decision.)  The applicant must be provided with at least 5 business days to respond (before the employer can make a final decision on employment).  If the applicant notifies the employer in writing that he or she disputes the accuracy of the conviction history and is obtaining evidence to support that assertion, the applicant must be given an additional 5 business days to respond to the notice.  The employer is required to consider any information submitted by the applicant before making a final decision.  If a final decision is made to deny employment, the employer again must provide written notification to the applicant and inform the applicant of his or her right to file a complaint with the Department of Fair Employment and Housing and/or of any internal appeal rights the applicant may have to challenge the decision.  (Again, the employer may, but is not required to, explain its justification/reasoning for its final decision.)  This new law does not apply in those limited circumstances where a public or private employer is required by law to conduct a criminal background check or to restrict employment based on criminal history.  Covered California employers should familiarize themselves with the requirements of this new law and modify their employment applications and hiring processes accordingly

AB 1701 (Contractor Liability/Wages):  This new law provides that for contracts entered into on or after January 1, 2018, a direct contractor making or taking a contract in the state for the erection, construction, alteration, or repair of a building, structure, or other private work, shall assume, and is liable for, any debt owed to a wage claimant or third party on the wage claimant’s behalf, incurred by a subcontractor at any tier acting under, by, or for the direct contractor for the wage claimant’s performance of labor included in the subject of the contract between the direct contractor and the owner.  The direct contractor’s liability extends only to any unpaid wage, fringe or other benefit payment or contribution, including interest owed, but does not extend to penalties or liquidated damages.  The Labor Commissioner or a wage claimant may bring a civil action against a direct contractor to collect wages owed.

AB 46 (Gender Pay Equality):  This new law simply provides that California’s Equal Pay Act applies to public employers just as it applies to private employers.

SB 396 (Expansion of Harassment Training):  California’s Fair Employment and Housing Act already requires employers with 50 or more employees to provide at least 2 hours of prescribed training and education regarding sexual harassment to all supervisory employees within 6 months of their assumption of a supervisory position and once every 2 years thereafter.  Effective January 1, 2018, this new law requires covered employers to include information on harassment based on gender identity, gender expression, and sexual orientation as a component of that prescribed training. Employers also have to publish new/amended posters (to be developed by the Department of Fair Employment and Housing) on the subjects of harassment and transgender rights.

AB 168 (Salary Inquiries):  This new law, effective January 1, 2018, adds section 432.3 to the Labor Code and prohibits employers (public and private) from inquiring about, or considering, information concerning an applicant’s prior salary history in determining whether to offer employment to the applicant and/or the amount to pay the applicant.  It also requires employers to provide the pay scale for a position upon request by an applicant.  An applicant may, however, voluntarily (without prompting by the employer) disclose information concerning prior salary history, in which case the employer may consider it in determining the employee’s compensation.  This new law is intended to combat the continuation of historical pay gaps existing along gender and/or racial lines.

SB 63 (Expansion of Parental Leave Rights):  This new law, effective January 1, 2018, adds section 12945.6 to the Government Code and provides that an employee who has at least 12 months of service and 1250 hours of service within the prior 12 months, and who works at a worksite in which the employer employs at least 20 employees within 75 miles, is entitled to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.  The employer also is required to maintain the employee’s group health coverage during such leave, on the same terms as if the employee was actively reporting to work.  There are already state and federal statutes requiring larger employers (50 or more employees) to provide such leave, but this new law creates parental leave rights for employees of smaller employers.  If an employee is already entitled to leave under the FMLA or CFRA, this new law does not grant the employee another 12-week bucket of time off to also use.

California employers will need to modify their policies and practices as necessary in light of these new laws, including by reviewing and revising employment applications that contain salary history fields and revising or creating a parental leave policy that reflects an employee’s entitlement to take parental leave under the expanded eligibility conditions set forth in the new parental leave law.



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