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California Employers: Big Changes in Employment Laws

There are a number of changes for California employers of all sizes in employment and labor law, as well as human resources compliance. Employers should review these new obligations, set a plan for compliance, and prepare for enforcement of these new requirements. 

Below are five (5) of the more significant employment and labor laws that take effect on January 1, 2018. Note that the 4th and 5th laws have significant impact on employers’ hiring practices, and necessitate that employers immediately ensure that their job application forms (and related documents) comply with the new laws.

1. NEW PARENT LEAVE ACT (SB 63)

The “New Parent Leave Act,” extends CFRA rights to employees working at locations with at least 20 employees within a 75 mile radius. The California Family Rights Act (“CFRA”) had already provided child bonding parental leave to employees at companies with 50 or more employees. This has now been expanded to small businesses with the recent California Senate Bill 63.

Essentially, like the California Family Rights Act, the bill establishes that an employee must have at least 12 months of service with a covered employer. The employee must have at least 1,250 hours of service during the 12-month period in order to take up to 12 weeks of unpaid family leave. The purpose of the leave is to allow an employee time to bond with a new child within one year of the child’s birth, adoption, or foster care placement. 

2. IMMIGRATION WORKER PROTECTION ACT (AB 450)

Assembly Bill 450, “the Immigration Worker Protection Act”, prohibits employers from allowing federal immigration enforcement officials to access non-public areas of a work place without a judicial warrant. Governor Brown recently signed legislation limiting the coordination between local and state law enforcement and federal immigration officials. AB 450 was drafted to mirror this effort.

The Act also prohibits an employer from voluntarily allowing an immigration enforcement agent to access, review or obtain employee records without a court order or subpoena. The Act provides the following exceptions to this prohibition: 

  • Employment Eligibility Verification forms and other documents for which a Notice of Inspection has been provided to the employer.
  • Instances where federal law requires employers to provide access to records. 

If employees are to be subject to an agency’s inspection the Act requires employers to provide sufficient notice that must also meet specific content requirements in order to be compliant.

3. HARASSMENT TRAINING ON GENDER IDENTITY, EXPRESSION & SEXUAL ORIENTATION (SB 396)

The California Fair Employment and Housing Act (FEHA) prohibits the harassment of an employee directly by the employer or indirectly by agents of the employer with the employer’s knowledge. Senate Bill 396 amends Sections 12950 and 12950.1 of the Government Code, and Sections 14005 and 14012 of the Unemployment Insurance Code, relating to employment.

SB 396 requires California employers with 50 or more employees to expand their mandatory sexual harassment prevention training to include the topics of “gender identity, gender expression and sexual orientation.” This training, which is conducted biennially for supervisory and managerial employees, must include practical examples to address such harassment. Employers must also post a DFEH-approved poster for all employees to review regarding transgender rights. The poster can be printed for free from here.

4.SALARY INQUIRY LIMITS - APPLICANT’S PRIOR SALARY HISTORY (AB 168) 

AB 168 enacts Labor Code section 432.3, which prohibits California employers from asking job applicants about their salary history, including any benefits and other compensation information from previous employment. If applicant voluntarily coughs up salary info, that’s ok. If employee asks for salary/pay range employer must provide it.

While California employers cannot currently use an applicant’s prior salary to justify any disparity in compensation, the inclusion of section 432.3 now keeps employers asking about salary history when interviewing, or making a job offer to applicants. If an applicant voluntarily provides their salary history, then an employer can use that information for salary consideration. Section 432.3 also requires employers to provide the pay scale of a position to an applicant, which makes California the first state to do so.

5.CONVICTION HISTORY OF APPLICANTS (AB 1008)

A number of other states have already enacted what is popularly known as “ban-the-box” laws, which limit an employer’s ability to review and consider a job applicant’s prior criminal conviction history. The California Fair Employment and Housing Act (FEHA) has now been amended to prohibit employers with five or more workers from:

  • Including on any application for employment questions that seek the disclosure of an applicant’s conviction history before making a conditional offer of employment to the applicant.
  • To inquire into, or consider the conviction history of the applicant, including any inquiry about conviction history on any employment application, until after the employer has made a conditional offer of employment to the applicant.
  • To consider, distribute, or disseminate certain information while conducting a conviction history background check in connection with any application for employment

The intent of the new “ban-the-box” law is to prohibit employers from making hiring decisions based on the criminal conviction records of an applicant. However, the law does provide for specific exceptions that are limited to the following: 

  1. positions with criminal justice agencies; 
  2. farm labor contractors; 
  3. and criminal background check, conviction history or restriction of employment based on an applicant’s criminal history as required by state, federal or local law. 

HR PRACTICE IMPLICATIONS – WHAT EMPOYERS SHOULD DO

As summarized above, on January 1, 2018, California Assembly Bill 1008, known as the “Ban the Box” law, will take effect regulating employers’ decisions to deny employment to an applicant based on his/her conviction history. “Ban the Box” has previously been in effect in a number of local jurisdictions, including Los Angeles and San Francisco; now it is in effect statewide, including out-of-state employers with operations in California.

Fair Employment and Housing Act (“FEHA”) regulations previously went into effect in July 2017 requiring employers to demonstrate that criminal history information they use in employment decisions was job-related. These new regulations will go much further, not only limiting California employers’ rights to use an applicant’s criminal background history in making employment decisions, but will significantly alter the hiring process for many employers.

Prohibition Against Pre-Offer Inquiries Regarding Applicants’ Conviction History

The new law makes it unlawful under the FEHA for an employer with five or more employees to inquire about or consider an applicant’s conviction history until the applicant has received a conditional offer of employment. An employer will be prohibited from:

  • Including on any employment application a question that seeks disclosure of an applicant’s conviction history;
  • Inquiring into or considering the conviction history of the applicant, until after the employer has made a conditional offer of employment; and
  • Considering, distributing, or disseminating information relating to arrests that do not result in a conviction, diversion programs, or convictions that have been sealed, dismissed, expunged, or statutorily eradicated pursuant to law.

Process for Making Adverse Employment Decisions

The law also regulates employers in their decisions to deny employment to an applicant based on his/her conviction history.

The Individualized Assessment

If an employer intends to deny a position based entirely or partially on the conviction history, it must complete an individualized assessment which analyzes the relationship between the conviction and specific duties of the position.

The conviction history must bear directly and adversely on specific duties of the position to justify the denial. As part of the Assessment, the employer must consider all of the following:

  • Nature and gravity of the offense or conduct;
  • The time that has passed since the offense or conduct and completion of the sentence; and
  • The nature of the job.

Notice of Preliminary Decision

If after conducting an individualized assessment, the employer believes the conviction history disqualifies the applicant from the position, a written notice of the preliminary decision must be provided to the applicant, along with a copy of the conviction report, if any, and notice of the right to respond before the employer’s decision becomes final. Although not required, an employer may provide an explanation of its reasoning.

The Final Decision

Before making a final decision, an employer must provide the employee at least five days to respond to the preliminary decision.

The employer is required to consider information submitted by the applicant during this time period in reaching its final determination.

Thereafter, if an employer makes a final decision to deny an applicant a position for any reason related to the applicant’s conviction, the employer must provide written notice to the applicant. The notice must include the following information:

  • Final denial or disqualification;
  • Any procedures or processes instituted by the employer to challenge the decision or request for consideration; and
  • The right to file a complaint with the Department of Fair Employment and Housing.

Exceptions

The new law does not apply to the following positions:

  1. a position for which a state or local agency is otherwise required by law to conduct a conviction history background check;
  2. a position with a criminal justice agency as defined by the California Penal Code;
  3. a farm labor contractor as defined by the California Labor Code; and
  4. a position where an employer is required by state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.

Penalties for Violations

Applicants can sue employers for discrimination in violation of the FEHA. State law provides for a variety of remedies for victims of employment discrimination, including:

  • Back pay (past lost earnings)
  • Front pay (future lost earnings)
  • Hiring / Reinstatement
  • Promotion
  • Out-of-pocket expenses
  • Policy changes
  • Training
  • Reasonable accommodation(s)
  • Damages for emotional distress
  • Punitive damages
  • Attorney’s fees and costs

ACTION ITEMS FOR EMPLOYERS

Employers in California, at a minimum, should evaluate whether they need to revise their existing employment application, and review any policies pertaining to the screening and hiring process. They should also consider whether to undertake a broader (and privileged) assessment to strengthen their compliance with federal, state, and local employment laws that regulate use of a candidate’s criminal history.

Suggested action items for employers with employees in California and any other jurisdictions having ban-the-box laws are as follows: 

  • Review and update your hiring/on-boarding process, including policies, procedures, and documents related to the screening process, to comply with the new requirements. For example, employers who maintain a blanket no-hiring policy for persons with criminal convictions should have their policies evaluated for compliance;
  • Refrain from inquiring about or considering the conviction history of an applicant before the applicant receives a conditional offer of employment;
  • Modify offer letters to condition employment on the results of criminal background checks;
  • Review job applications and related forms (job postings, advertisements, interview forms, policies and other job application materials) for impermissible inquiries regarding criminal records; 
  • Immediately remove any questions requesting the disclosure of an applicant’s criminal history from your job applications or other application documents (this may include background check consent forms);
  • Post and distribute any required notices;
  • Employers who operate in multiple jurisdictions in addition to California, such as New York, Philadelphia, San Francisco, Austin or Oregon, should particularly review any standardized forms that may be in use in multiple jurisdictions;
  • Covered employers also should ensure that all hiring and recruiting personnel are aware of “ban the box” laws—whether they currently apply to them or not;
  • Provide training and FAQs to managers and supervisors who conduct job interviews and make or influence hiring and personnel decisions to explain permissible and impermissible inquiries into, and uses of, criminal records, and convey the company's policies and procedures for storing such records and documenting related hiring and personnel decisions;
  • Review the hiring process to ensure compliance, including the timing of criminal background checks, the distribution of mandatory notices, and the application of mandatory deferral periods;
  • Review any record retention policies (especially regarding applications and other hiring materials) and revise as needed to include retaining required materials for at least three years;
  • If inadvertently made aware of prohibited information, document the manner in which the information was obtained and, where prohibited, avoid reliance on that information in making an employment determination;
  • Before taking an adverse action, such as rescinding an offer of employment, ensure compliance with applicable law and clearly document the business reasons supporting that decision; and
  • include the following language in any advertisements or solicitations seeking applicants: “The employer will consider for employment qualified Applicants with Criminal Histories in a manner consistent with applicable state and local law.”

Moreover, all employers, including nationwide employers, may want to conduct an assessment of their pre-employment screening practices to strengthen their compliance with the Fair Credit Reporting Act and state fair credit reporting laws.


For additional information about this blog, please contact your Poms & Associates broker, or send your question to us through “Ask Poms.”

Poms & Associates Risk Services is committed to the philosophy that “Knowledge is the Best Insurance,” and to assisting our clients with meeting the administrative requirements resulting from legislation, regulations, and evolving case law.

Your Poms Risk Services Team is available to provide answers to day-to-day questions in the areas of employment, human resources, employee benefits, health & safety, organizational development and more, so that you can focus on running your business. In addition, we can assist organizations with training, document preparation and compliance assessments on a per project basis. For more information, please contact us at (505) 797-1354 or email us.

Disclaimer – Please Note:

This blog/material is provided for general information purposes only and is not a substitute for legal advice particular to your situation, and Poms & Associates, Insurance Brokers Inc. and the author expressly disclaim all liability relating to actions taken or not taken based solely on the content of this information.

The author makes every effort to offer accurate, and practical Human Resources management, employer, and workplace advice, both on this website, and linked to from this website, but he is not an attorney. The content on this site, while authoritative, is not guaranteed for accuracy and legality, and is not to be construed as legal advice. Additionally, employment laws and regulations vary from state to state and country to country, so the site cannot be definitive on all of them for your workplace.

When in doubt, always seek legal counsel or assistance from State, Federal, or International governmental resources, to make certain your legal interpretation and decisions are correct. The information on this site is for guidance, ideas, and assistance only.