RJO Update: Labor and Employment Key Changes to California Employment Law for 2019

• Limits on releases and non-disparagement agreements.

• Expands employer liability for non-employee harassment.

• Further limits employers’ ability to be awarded fees and costs in FEHA claims.

• Declares Legislature’s Intent as to several issues in FEHA harassment cases.

Declares that a “single incident of harassing conduct is sufficient to create a triable issue regarding the existence of a hostile work environment” (rejects holding in Brooks v. City of San Mateo (9th Cir. 2000) 229 F.3d 917).

Affirms that a discriminatory remark, even if not made directly in the context of an employment decision or made by a non-decision maker, may be relevant evidence of discrimination (affirms decision in Reid v. Google, Inc. (2010) 50 Cal. 4th 512).

Confirms that the standard for what constitutes a valid claim for sexual harassment does not vary by the type of workplace (disapproves Kelley v. Conco Companies (2011) 196 Cal. App. 4th 191).

Declares that harassment cases are “rarely appropriate for summary judgment” (affirms decision in Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243).

• “By-Stander Training”

(The existing law only applies to larger employers (50 or more employees) and does not expressly require training of non-supervisory employees).

AB 1976 amends existing law to require that the location be one other than a bathroom for lactation purposes. Temporary locations are acceptable under the amended law if the location is used only for lactation purposes while an employee expresses milk. Agricultural employers may provide a private, enclosed, and shaded space, as specified.

The amended law includes an undue hardship exemption for an employer who can demonstrate that it cannot provide a location other than a bathroom. In such cases the employer must use reasonable efforts to provide a room or location that is not a toilet stall.

Note: Employers in San Francisco are subject to San Franciscoís Lactation Accommodation Ordinance, which imposes stricter requirements.

The FMLA provides eligible employees with time off for a ìqualifying exigencyî arising out of the foreign deployment of the employeeís spouse, son, daughter, or parent. SB 1123 expands the scope of the PFL program, beginning January 1, 2021, to allow employees to collect PFL benefits for time off work due to these military related qualifying exigencies.

AB 2282 amends § 432.3 to clarify several issues that were previously open questions under the law:

• The “pay scale” employers must provide applicants means a salary or hourly wage range.
• A “reasonable request” for a pay scale means a request made after an applicant has completed an initial interview with the employer.
• Employers may ask applicants about their salary expectation for the position being applied for.
• The term “applicant” does not include current employees (in any capacity or position).

Labor Code §1197.5 prohibits paying wage rates less than those for employees of the opposite sex for substantially similar work, unless the employer demonstrates that the wage differential is based on a seniority system, a merit system, a system that measures earnings by quantity or quality of production, or bona fide factor other than sex, such as education, training, or experience. AB 2282 amends §1197.5 to clarify that employers are not prohibited from making a compensation decision based on a current employee’s existing salary, so long as any resulting wage differential is justified by one or more of these factors.

This law requires the Division of Labor Standards Enforcement (DLSE) to maintain and post a list of any port drayage motor carrier with any unsatisfied final court judgment, tax assessment, or tax lien, including DLSE administrative hearing awards, for various wage and hour violations, unreimbursed employee expenses, payroll tax, failure to provide workersí compensation insurance, or misclassification of employees as independent contractors.

As a result of this new law, business entities with 25 or more workers (including temps and those hired through a labor contractor) that engage the services of a port drayage motor carrier identified on the DLSE list will jointly and severally liable be for numerous wage violations–minimum and overtime wages, breaks and recovery periods, vacation pay, paid sick leave, expense reimbursement, unlawful deductions, penalties for not having workers compensation coverage, other penalties and interest.

Joint and several liability will apply from the time the driver is dispatched to begin work on behalf of the customer until all tasks are completed incidental to that work, and the driver is ready to be dispatched to haul freight on behalf of another customer.

The law provides a carve out in some limited circumstancesóit will be inapplicable to employees covered by certain collective bargaining agreements, provided the CBA, among other requirements, includes a specific waiver of ß 2810.4. Also, if the customer and the trucking company have an existing contract at the time the company is listed on the ìblacklist,î joint liability shall not apply until the expiration of that contract or 90 days, whichever is shorter.

While businesses cannot agree to contractual waiver of joint and several liability, the law does allow parties to establish contractual rights of contribution and indemnity.

• premium wage rates for all overtime hours worked;
• a regular hourly pay rate of not less than 30 percent more than the state minimum wage;
• an express and clear and unambiguous waiver of PAGA requirements;
• prohibitions of all Labor Code violations that would be redressable under PAGA; and
• a grievance and binding arbitration procedure to redress these violations that authorizes the arbitrator to award otherwise available remedies (except for the award of PAGA penalties that would be payable to the Labor and Workforce Development Agency)

The exception will only apply until the earlier of the date the CBA expires or January 1, 2028, when the new law is scheduled to be repealed.

Applicable to contracts entered into on or after January 1, 2019, direct contractor or a subcontractor must include a contract provision specifying the documents or information that the direct or subcontractor will require a lower tiered subcontractor to produce. Absent this provision, the direct contractor or subcontractor cannot withhold any disputed payments.

This amendment also removes a provision of section 218.7 that indicated the direct contractorís liability for unpaid wages and benefits was in addition to obligations and remedies otherwise provided by law.

These changes were effective immediately upon the Governorís signature on September 19, 2018.

• Clarifies that the same set of specified occupations are subject to the current requirement that only 30% of skilled journeypersons employed to perform work on those contracts or projects be graduates of an apprenticeship program.
• Requires public agency or other awarding body to forward a copy of the monthly report to the Labor Commissioner for issuance of a civil wage and penalty assessment and a copy of the plan, if any, to achieve substantial compliance (if the monthly report does not demonstrate compliance.)
• Limits withholding to 150% of the value of the monthly billing for a subcontractor that fails to timely submit the required information or does not demonstrate compliance, and would allow the contractor, bidder, or other entity to withhold the same amount from the subcontractor.
• Requires penalties of $5,000 per month of non-compliant work ($10,000 per month in the case of second or subsequent violations within 3 years) when the Labor Commissioner determines that a contractor or sub failed to use the required skilled and trained workforce.
• Requires contractors to obtain a declaration under penalty of perjury from subcontractors that they have met the skilled and trained workforce requirements before making the final payment to subcontractors.
• Makes contractors and subcontractors ineligible to bid on, be awarded, or perform work on a contract for a public works project for violations of these requirements with the intent to defraud and requires the Labor Commissioner to publish on the commissioner’s Internet Web site a list of ineligible contractors.