What Employers Need to Know to Be Compliant in 2019

October 2018 Newsletter

by Granite Insurance Brokers

What Employers Need to Know to Be Compliant in 2019

2018 has been busy, and there is a lot of new developments potentially impacting California employers for 2019 and beyond. This update focuses on current topics facing California employers and what you need to know to be compliant.

Harassment Prevention Training

As most California employers know, existing law requires employers with 50 or more employees to provide 2-hours of harassment prevention training to managers and supervisors every two years. This training is often referred to as “AB 1825 training” in reference to the legislation that first mandated that training requirement.

However, a new law will greatly expand the number of California employers who are required to provide training. Rather than “50 or more employees,” the law will mandate training for employers with five or more employees. Employers must provide at least 2 hours of training to supervisory employees and at least one hour of training to non-supervisory employees by January 1, 2020, and every 2 years thereafter.

In addition, the following requirements must be met:

  • Supervisors (2 hours) / non-supervisors (1 hour) within six months of hire / promotion (and every two years afterwards)

  • Temporary / seasonal employees hired for less than six months must receive training within earlier of 30 calendar days or 100 hours worked

  • And include “Bystander intervention training”. Employers should include providing information and practical guidance to enable bystanders to recognize problematic behaviors, and provide the motivation, skills and confident to intervene as appropriate

The good news is, the new law requires Department of Fair Employment & Housing (DFEH) to develop or obtain two online training courses—a two-hour online course for supervisory employees and a one-hour course for non-supervisory employees—and to make them available on the DFEH website. The law specifies that the online training courses shall contain an interactive feature that requires the viewer to respond periodically to questions in order to continue. In addition, DFEH is required to make the online training videos available in other languages.

You are not necessarily required to utilize the online DFEH training videos. However, any questions resulting from the online training course shall be directed to the employer’s human resources department or equally qualified professional, not to DFEH. An employer may use other training resources to better align the company’s goals and expectations.

Obviously, until DFEH develops the required online courses, their effectiveness cannot really be evaluated; therefore, it is difficult at this time to predict whether the DFEH online video will truly be a viable option for California employers.

The new law specifies that an employer who has provided the training to an employee after January 1, 2019 is not required to provide training again by the January 1, 2020 deadline.

Disclosure of Sexual Harassment

Any provision in a contract or settlement agreement that prevents a party to the contract from testifying about criminal conduct or sexual harassment in an administrative, legislative, or judicial proceeding will be void and unenforceable.

Settlement of Sexual Harassment Claims

This new law prohibits provisions in settlement agreements entered into after January 1, 2019 that prevent disclosure of factual information pertaining to claims of sexual assault, sexual harassment, gender discrimination or related retaliation that have been filed in court or before an administrative agency. The new law does not prohibit a provision that prevents the parties to the agreement from disclosing the amount of the settlement. Additionally, at the claimant’ request, the settlement agreement may include a provision that limits the disclosure of the claimant’s identity or of facts that would lead to the discovery of the claimant’s identity.

Sexual Harassment Relationships

The types of relationships that can be subject to a claim of sexual harassment has been expanded to include lobbyists, directors, producers, elected officials, and investors. This statute generally applies to work relationships where one person holds himself out as being able to help someone establish a business or professional relationship directly or with a third party.

Fair Employment and Housing Act Amendments

Amendments to the Fair Employment and Housing Act (FEHA), prohibit employers from requiring employees to release a FEHA claim in exchange for a bonus, raise, or continued employment, and making employers liable for any kind of unlawful harassment by non-employees, not just sexual harassment, in situations where the employer failed to take appropriate remedial action.

Sexual Assault Statute of Limitations

The statute of limitations for filing a civil action for sexual assault has been expanded to 10 years after the alleged assault, or three years after the plaintiff reasonably discovered an injury as a result of the assault, whichever is later.

Minimum Wage for Exempt Employees

Statewide minimum wage increases to $12.00 for larger employers (26+ employees) and to $11.00 for smaller employers (25 or fewer employees).

These increases in the minimum wage also impact exempt level employees because California employers must meet the minimum salary threshold for exempt status employees. Therefore, January 1, 2019 the minimum salary for exempt status increase to $49,970 for larger employers (26+ employees) and to $45,760 for smaller employers (25 or fewer employees).

It is recommended all employers regularly audit all currently exempt positions to determine if they meet the regulation's salary requirements and the duties test for exempt status.

Reminder: “Computer professional” overtime salary threshold to increase by January 1, 2019

Payroll Records Copies

Existing law already requires that employees and former employees have a right to inspect or copy their payroll records and that they must be allowed to do so within 21 days of such a request. Previously, the employee was responsible for making copies or paying for the cost of copies.

This new law requires the employer to provide copies of payroll records as opposed to requiring employees to copy the records themselves or pay for the cost of copying.

Paid Family Leave Usage Expanded

California has a Paid Family Leave program that provides partial wage replacement to employees who take leaves of absence for specified purposes. Beginning January 1, 2021, employees may receive wage-replacement benefits from the Paid family Leave program to take time off for reasons associated with being called to active duty or a spouse, domestic partner, parent, or child being called to active duty.

Training on Human Trafficking

Hotel and motel employers must provide at least 20 minutes of training on human trafficking awareness to employees who may come into contact with victims of trafficking. These employees include reception, housekeeping, bell desk employees, and other employees who regularly interact with customers. The new law requires covered employers to provide such training to covered employees within 6 months of hire and once every two years thereafter. This training must be provided by January 1, 2020.

Lactation Accommodation

The existing lactation accommodation law requires employers to make reasonable efforts to provide a location other than a toilet stall to be used for lactation. The new law specifies that the location should be something other than a bathroom and further specifies that it generally should be a permanent location but that it can be a temporary location if (1) the employer is unable to provide a permanent location due to operational, financial, or space limitations; (2) the temporary location is private and free from intrusion while being used for lactation purposes; and (3) the temporary location is not used for other purposes while being used for lactation. The new law also provides that an agricultural employer may comply by allowing an employee to use the air-conditioned cab of a tractor or truck. If an employer can prove that it is an undue hardship to comply with these requirements, the employer may be able to provide a location (including a bathroom) other than a toilet stall for the employee to use for lactation purposes.

New Parent Leave Act

California’s New Parent Leave Act went into effect on January 1, 2018 but it’s worth repeating as many employers are unaware of this new law. The New Parent Leave Act requires employers with at least 20 employees to provide employees with 12 weeks of unpaid, job-protected leave for the purpose of parental bonding following the birth, adoption, or foster care placement. Although unpaid, employees may be eligible to receive benefits through the Paid Family Leave program while on leave.Similar to FMLA and CFRA, a eligible employee must work for the employer for at least 12 months and work at least 1,250 hours during the 12-months prior to taking the leave of absence. An employee must work at a job site that employs at least 20 employees within a 75-mile radius.

If you haven’t already, you will want to make sure your handbook and leave policies are updated accordingly.

Criminal History Inquiries

Employers have limited ability to make criminal history inquiries and use criminal history information when making employment decisions. Existing law makes an exception for employers who are required by federal or state law to inquire into an applicant’s or employee’s criminal history. This amendment is intended to tighten the exception to apply only where an employer is required by law to inquire into a “particular conviction” or where an employer cannot by law hire someone with a “particular conviction.” to make clear that employers may only consider “particular convictions” when assessing criminal history. “Particular conviction” is defined only to mean “a conviction for specific criminal conduct or a category of criminal offenses prescribed by any federal law, federal regulation or state law that contains requirements, exclusions, or both, expressly based on that specific criminal conduct or category of criminal offenses.”

Disqualification based on the background should be clearly defined. Any reason for excluding a candidate for a negative background check should be well documented as part of company policy and proper process followed. This will alleviate any issue around discrimination based on background information.

Salary History Inquiries

Existing law prohibits an employer from relying on the salary history information of an applicant for employment as a factor in determining whether to offer an applicant employment or what salary to offer an applicant. Existing law requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment.

The new legislation attempts to clarify some of the provisions that were unclear such as under what circumstances an employer could use prior salary to justify a disparity in pay, what determines a pay scale, and what is an applicant.

It was not clear whether the term “applicant” meant only external applicants for a position or also current employees applying for the position. The new law states an “applicant” is an individual who seeks employment with the employer, not a current employee.

A pay scale means a “salary or hourly wage range” and an employer may ask an applicant their salary expectations.

ABC Test

One of the most common mistakes made by employers is misclassifying employees as independent contractors. Proper worker classification is important because it determines if an employer must withhold income taxes and pay Social Security, Medicare taxes and unemployment tax on wages paid to an employee as well as provide benefits, 401k, and workers compensation.

The general rule has been that an individual is an independent contractor if the employer has the right to control or direct only the result of the work, not what will be done and how it will be done.

However, the California Supreme Court recently adopted “ABC Test” for determining whether workers in California should be classified as employees or as independent contractors.

Under the ABC test, the employer must establish each of the following three factors:

(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and

(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and

(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

California employers will want to review their relationship under the “ABC test” to determine whether any or all such workers should be reclassified.

Action Items

  1. Have harassment training protocols updated consistent with the new requirements.

  2. Have arbitration and confidentiality agreements reviewed for compliance with the new restrictions on confidentiality of harassment claims.

  3. Have harassment policies updated.

  4. Have policies and procedures updated regarding requests for payroll records.

  5. Review salaries of exempt level employees to make sure they meet the minimum salary threshold.

  6. Ensure you are paying the proper minimum wage for your municipality.

  7. Determine a set location for lactating mothers.

  8. Update your leave policy to accommodate new parents.

  9. Clearly define what will disqualify a candidate based on background investigation.

  10. Ensure you are properly classifying your independent contractors.