Now is the time of year that we recommend employers review and update their handbooks for compliance with California’s new laws and regulations. While employers often struggle with drafting and implementing handbooks, once a handbook is in place it is relatively inexpensive to annually update. We cannot stress enough how important handbooks are to employer defenses against employee lawsuits—especially class action lawsuits. An example of this is the seminal Brinker case. In Brinker, the California Supreme Court held that a class action should be certified against an employer with over 80,000 employees because the phrase “or major fraction thereof” was missing from the employer’s rest period policy in the handbook. In the California Supreme Court’s own words: “If [an employer] . . . adopts a uniform policy authorizing and permitting only one rest break for employees working a seven-hour shift when two are required—it has violated the wage order and is liable.” Other California courts have taken this approach a step further and have held that class action lawsuits may be certified against companies that lack appropriate written policies. See Bradley v. Networkers Int’l, LLC, 211 Cal. App. 4th 1129, 1150 (2012) (“The lack of a meal/rest break policy and the uniform failure to authorize such breaks are matters of common proof.”).
Important Updates for 2015
In 2015, employers must prepare for a number of new legal developments, such as the new Healthy Workplaces, Healthy Families Act of 2014. We have discussed this new law at length in a previous blog post—here we should just mention that this new law requires new compliance procedures of nearly all California employers. Further, there are numerous requirements for employers who wish to utilize their current PTO, vacation, or sick leave policy to comply with this new law. While there is no one correct way to comply with these new requirements, we recommend that all employers review their policies for compliance well before the effective date of this law, July 1, 2015.
The legislature recently passed AB 1443, also effective on July 1, 2015. This new law extends the anti-discrimination and harassment protections of the Fair Employment and Housing Act (“FEHA”) to unpaid interns and volunteers. This statue also extends the obligation to accommodate bona fide religious beliefs to these persons. Having your handbook updated to reflect these changes doesn’t just help with compliance, it can serve as an important reference guide for your human resources professionals.
In 2014, the legislature passed a law which penalizes employers for failing to provide “cool-down” periods to employees who work outdoors. The statute placed no limits on the number of cool-down periods an employee could take, or the length of these cool-down periods (except that they must be at least five minutes each). The legislature modified this law to clarify that these unlimited cool-down break periods must be paid. As with meal and rest periods, it is of the utmost importance that employers with employees who work outdoors have a compliant policy in place.
The legislature amended California Labor Code section 230.3, which prohibited employers from discriminating against employees for taking time off to perform emergency duties as volunteer firefighters, reserve peace officers, or emergency rescue persons. The newly amended law expanded the meaning of “emergency rescue personnel” to include an officer, employee, or member of a disaster medical response entity sponsored or requested by the state.
The legislature recently passed AB 1660, which prohibits employers from discriminating against persons who had their driver’s license issued under section 12801.9 of the Vehicle Code. This section of the Vehicle Code allows the DMV to issue a driver’s license to a person who is unable to submit satisfactory proof of authorization to be in the United States under federal law. While employers may not discriminate against those who have licenses issued under this section, employers are still permitted to take action required by the federal immigration laws, without running afoul of this new anti-discrimination law.
With regard to the construction industry, the legislature passed AB 1650 this year, which applies to construction or improvement projects for state agencies with a total cost exceeding $250,000. The new law will forbid contractors on certain jobs from asking applicants to disclose information concerning their conviction/criminal history at the time of their initial employment application.
California enacted AB 1792, which prohibits employers from discriminating or retaliating against any employee because of his or her participation in a public benefits program, including CalFresh and Medi-Cal.
Finally, we note that there have been many developments in the law pertaining to employer-employee arbitration agreements. The California Supreme Court in Iskanian decided that employment class action waivers are enforceable in arbitration agreements; however, the Court noted that waivers for collective actions for statutory penalties under the Private Attorney General Act (“PAGA”) are not enforceable. That said, a number of federal district courts have recently disagreed with the California Supreme Court and enforced waivers of collective PAGA actions. In light of these new developments, we recommend that all employers discuss with employment law counsel the suitability of arbitration agreements for their workforce. We further recommend that larger employers implement arbitration agreements with a waiver of PAGA claims and include a severability clause.
As demonstrated above, the law in California is ever-changing. One year’s compliant handbook can become non-compliant within the next year. In light of this, we recommend that employers annually have their handbook reviewed. If your company doesn’t have a handbook, or has one that has not been updated in compliance with the new laws in California, we recommend you contact us, or other qualified employment law counsel, to do so. Our review process also includes a review of the most common compliance mistakes employers make, including wage and hour issues. Often we find areas of non-compliance and assist the employer in making necessary corrections and thereby avoid substantial liability to the employer.