United States: California Legislative Update: Heading Into The 2016 Session's Final Month

The California Legislature will return from its July recess on August 1, and will devote that month to final consideration of legislation for 2016.

The session has entered a somewhat anticlimactic stage for employment legislation.  There are few major pieces of legislation left to consider unless, as can happen, a new bill is brought up at the last minute.¹  Certainly the biggest employment law change in 2016 so far is the increase, and indexing, of the state's minimum wage.²

The Legislature must complete its work for this year's session by August 31, 2016.  After the Legislature enters its final recess, Governor Brown will have until September 30, 2016, to sign or veto bills passed by the Legislature at the end of the session.

Following are the major legislative developments affecting employment law for California private sector employers since our last report.³

New Laws

Unless otherwise noted, all new laws become effective January 1, 2017.

Wage Statements

AB 2535 provides that itemized wage statements required under current law need not show total hours worked for specified exempt employees for whom employers do not have to track hours. Amends Labor Code section 226.

Temporary Service Employees' Wages

AB 1311, with certain exceptions, makes California's weekly pay requirement applicable to a security guard employed by a private patrol operator who is a temporary services employer.  The new law took effect July 22, 2016, as an urgency statute. Amends Labor Code section 201.3.

Local Wage Investigation Subpoenas

SB 1342 specifies that a legislative body of a city or county may delegate that body's authority to issue subpoenas and to report noncompliance thereof to the judge of the superior court of the county, a county or city official, or a department head, and to enforce any local law or ordinance, including local wage laws. Adds Government Code section 53060.4.

AB 1709 replaces the term "hearing impaired" with the term "hard of hearing," or a close variation of "hard of hearing," in 33 statutes.  Amends various Codes.

Key Pending Bills

The following outlines the current status of key pending bills. The measure's latest committee or house location is noted in italics.

Equal Pay

SB 1063 would expand the state's equal pay statute, prohibiting discrimination in compensation based on sex, to also prohibit an employer from paying any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work.  Assembly Appropriations.

AB 1676, which previously prohibited an employer from demanding an applicant's salary history, was gutted and amended in the Senate.  The bill now specifies that, for California's equal pay statute (Labor Code § 1197.5), prior salary cannot, by itself, justify any disparity in compensation under the bona fide factor exception to the prohibition on discrimination based on gender.  Senate Appropriations.

Janitorial Industry

AB 1978 would expand certain employer requirements to those in the janitorial industry. The bill would apply to about 220,000 California employees in this sector. The measure expands existing employee protections concerning workplace sexual violence and sexual harassment, and requires all covered workers and supervisors to, at least annually, receive comprehensive, accurate and appropriate in-person training lasting at least four hours regarding sexual harassment and sexual assault. This training must provide an opportunity for interactive questions and answers. The bill also establishes minimum qualification standards for trainers who may deliver such training, including, but not limited to, a minimum of five years of experience conducting adult education with the demographics of the janitorial workforce (the collective bargaining agent that represents the employer's covered workers or the designee of the collective bargaining agent may deliver such trainings). In addition, the bill requires that, on and after January 1, 2018, no employer may conduct any janitorial business without a valid registration. All employers must be registered with the state Department of Industrial Relations. Finally, the measure requires the online posting of a janitorial contractor registry and database.  The bill is sponsored by SEIU California. Senate Appropriations.

Agricultural Industry

AB 1066, the "Phase-In Overtime for Agricultural Workers Act of 2016," would remove the exemption for agricultural employees regarding hours, meal breaks, and other working conditions, including specified wage requirements, and would create a schedule that would phase in overtime requirements for agricultural workers during four years, from 2019 to 2022, inclusive. Beginning January 1, 2022, the bill would require any work performed by a person, employed in an agricultural occupation, over 12 hours in one day to be compensated at the rate of no less than twice the employee's regular rate of pay. The bill would authorize the Governor to delay the implementation of these overtime pay provisions if the Governor also suspends the implementation of a scheduled state minimum wage increase. The bill would require the Department of Industrial Relations to update Wage Order 14 for consistency with these provisions. Senate Appropriations.

Other Pending Bills

While the previously mentioned bills are likely of the most interest to employers, there are other pending bills that would also affect some private sector employers.

Apprenticeship

AB 1926 would require that, if a contractor requests the dispatch of an apprentice to perform work on a public works project, the apprentice be paid the prevailing rate for the time spent on a required activity, including travel time to and from the activity, if any.  Senate Floor.

AB 2288 would require pre-apprenticeship programs in the building and construction trades to include a plan for outreach, recruitment, and retention of women and require the use of the Multi-Craft Core Curriculum developed to prepare students and pre-apprenticeship participants for labor-management apprenticeship programs.  The bill is sponsored by the State Building and Construction Trades Council of California. Senate Appropriations.

Agricultural Industry

AB 2574 would require state departments, including, but not limited to, the Department of Food and Agriculture, the Labor and Workforce Development Agency, and the Department of Veterans Affairs, to develop by July 1, 2017, a New Veteran Farmer and Rancher Outreach and Assistance Plan to disseminate information to veterans in California about federal and state veteran agricultural education, training, and other assistance programs. Senate Appropriations.

AB 2896 would authorize the Labor Commissioner to accept a credit card charge as a method of payment for farm contractor license fees.  Senate Floor.

SB 702 would extend until January 1, 2022, a Lake County-specific exemption of child labor law that allows minors to work during the peak agricultural season when school is not in session. Assembly Appropriations.

Arbitration

SB 1007 would provide that a party to an arbitration may have a certified shorthand reporter transcribe any deposition, proceeding, or hearing as the official record. The party requesting the transcript would have to request the report in a demand, response, answer, or counterclaim related to the arbitration, or at a pre-hearing scheduling conference at which a deposition, proceeding, or hearing is being calendared.  The bill would also require the party requesting the transcript to incur the expense of the reporter, except as specified in a consumer arbitration. A party whose request has been refused by the arbitrator could petition the court for an order to compel the arbitrator to grant the party's request to have a certified shorthand reporter transcribe any deposition, proceeding, or hearing, and for an order to stay any deposition, proceeding, or hearing pending the court's determination of the petition. Assembly Floor.

SB 1078 would require, in a consumer arbitration case, disclosing any solicitation made within the last two years by, or at the direction of, a private arbitration company to a party or lawyer for a party. The bill would require disclosure of solicitations made only after January 1, 2017. The bill would prohibit an arbitrator, from the time of appointment until the conclusion of the arbitration, from entertaining or accepting any offers of employment or offers of new professional relationships as a lawyer, expert witness, or consultant.  In addition, the bill  would prohibit the arbitrator, in a consumer arbitration case, from entertaining or accepting any offers of employment as a dispute resolution neutral in another case from a party or lawyer for a party in the pending arbitration.  The bill would, in a consumer arbitration case, authorize a party to recover arbitration proceeding costs from a private arbitration company or arbitrator if the court vacates the arbitration award after determining the arbitrator was involved with corruption, the rights of the party were substantially prejudiced by misconduct of a neutral arbitrator, or the arbitrator making the award either failed to timely disclose a ground for disqualification, or the arbitrator was subject to disqualification, but failed to disqualify himself or herself after receiving a timely demand to disqualify for violating ethics standards or disclosure requirements. The bill would only allow the recovery of costs after the private arbitration company or arbitrator is provided notice and an opportunity to be heard only on the issue of whether there was a violation of the ethics standards or disclosure requirements. The bill would prohibit the recovery of costs if the arbitration award is vacated solely on the basis of a harmless error. Assembly Floor.

Background Checks

AB 1843 would prohibit an employer from asking an applicant for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning specific juvenile court actions or custodial detentions.  Senate Appropriations.

Collective Bargaining Agreements

SB 954 would require per diem wages to include industry advancement and collective bargaining agreements' administrative fees if the payments are made under a collective bargaining agreement to which the employer is obligated. The bill would exclude from per diem wages, if the payments are not made under a collective bargaining agreement to which the employer is obligated, employer payments related to certain apprenticeship or training programs, worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978, and industry advancement and collective bargaining agreements' administrative fees. Finally, the measure would prohibit credit for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made under a collective bargaining agreement to which the employer is obligated. Assembly Floor.

Commuter Benefits

SB 1128 would remove the January 1, 2017, sunset provision from a program requiring certain employers in the San Francisco Bay Area to offer alternative-commute benefits to their employees. Assembly Floor.

Domestic Worker Bill of Rights

SB 1015 would delete the January 1, 2017, repeal date of the Domestic Worker Bill of Rights. Assembly Appropriations.

Equal Pay

AB 1890 would enact the Equal Pay for Equal Work Act of 2016. This law would require an employer with 100 or more employees in the state and a contract that amounts to $50,000 or more to submit a nondiscrimination program to the department, and to annually submit periodic reports of its compliance with that program on a schedule to be determined by the department. The bill would require the department to make these programs and reports available to the Commission on the Status of Women and Girls. The bill would authorize the department to require approval and certification of the program. The bill would permit the department to require an employer with fewer than 100 employees in the state or that have a contract with the state that amounts to less than $50,000 to comply with those program and report submission requirements. The bill would require the department to define an employee for the purpose of the requirement to submit a nondiscrimination program. The bill would require the nondiscrimination program to include policies and procedures designed to ensure equal employment opportunities for all applicants and employees; a description of employment selection procedures; and employee compensation data. The bill would specify that a contractor or subcontractor may submit, in lieu of the nondiscrimination program, a certain report subject to review by the United States Equal Employment Opportunity Commission. Senate Appropriations.

Health & Safety

SB 1167 would require the Division of Occupational Safety and Health, by July 1, 2018, to propose to the Occupational Safety and Health Standards Board a heat illness and injury prevention standard applicable to indoor workers. The bill would specify that this requirement does not prohibit the division from proposing, or the standards board from adopting, a standard that limits the application of high heat provisions to certain industry sectors.  Assembly Appropriations.

AB 2532 would repeal the requirement to verify an individual's legal status or authorization to work prior to the individual receiving employment services from state or local government agencies, or any private contracting agencies. This bill also repeals the associated workplace posting requirement regarding the need for such verification. Senate Floor.

SB 1001 would prohibit an employer or any other person or entity from discriminating against or engaging in unfair immigration-related practices against an applicant or employee or from reinvestigating or re-verifying an incumbent employee's authorization to work unless required to do so by federal law. Assembly Appropriations.

AB 2261 would authorize the Division of Labor Standards Enforcement to—with or without receiving a complaint from an employee—commence an investigation of an employer that it suspects has unlawfully discharged or otherwise discriminated against an individual in violation of any law under the jurisdiction of the Labor Commissioner. Senate Appropriations.

SB 1442 would require the Department of Fair Employment and Housing (DFEH) (instead of the Secretary of the Health and Human Services Agency) to investigate and enforce the laws prohibiting discrimination in the conduct, operation, or administration of state or state-funded programs or activities on the basis of race, national origin, ethnic group identification, religion, age, sex, sexual orientation, color, genetic information, or disability, and to issue rules and regulations. Assembly Appropriations.

Labor Commissioner Rulings

AB 2899 would require a person seeking a writ of mandate contesting the Labor Commissioner's ruling on an employer's non-payment of a minimum wage to post a bond with the Labor Commissioner, in an amount equal to the unpaid wages assessed under the citation, excluding penalties. The bill would require that the bond be issued for the unpaid employees and ensure that the person seeking the writ makes prescribed payments under the proceedings.  The proceeds of the bond, sufficient to cover the amount owed, would be forfeited to the employee if the employer fails to pay the amounts owed within 10 days from the conclusion of the proceedings.  Senate Appropriations.

AB 2337 would require employers to inform each employee of his or her rights as a possible victim of domestic violence, sexual assault, or stalking by providing that information in writing to new employees upon hire, and to other employees upon request. The bill would also require the Labor Commissioner, by July 1, 2017, to develop a form that an employer may elect to use to comply with these provisions and to post it on the Commissioner's website.  Employers would not be required to comply with the notice of rights requirement until the Commissioner posts the form. Senate Appropriations.

AB 2437 would require the Labor Commissioner, by June 1, 2017, to develop a model notice pertaining to workplace rights and wage and hour laws for employees of establishments licensed under the Board of Barbering and Cosmetology. The bill would require the model notice to be translated into specified languages.  Senate Appropriations.

AB 2895 would provide for employee access to written injury and illness prevention programs (IIPPs) and injunctive relief to an employee if an employer has not timely responded to a written request for a complete copy of the written injury prevention program and has failed to provide a copy upon an employee's request.  Senate Appropriations.

AB 2897 would require a car wash employer to provide written notice to a successor employer regarding the requirements of existing law prior to the sale or other transfer of the business.  Senate Floor.

AB 2898 would extend some existing time periods in the Labor Code Private Attorneys General Act of 2004 (PAGA) by requiring the agency, when it does not intend to investigate an alleged violation, to notify the employee and the employer within 45 days, and by authorizing the aggrieved employee to commence a civil action 48 days after having sent notice of the alleged violation. The measure would require the agency to send notification within 48 days if it intends to investigate an alleged violation, and would authorize an aggrieved employee to commence a civil action after 173 days if, after having received notice of the agency's intent to investigate, no citation is issued or no further notification is received from the agency.  Senate Appropriations.

AB 2068 requires talent services that post information about artists under contract via specified online and mobile platforms to remove photographs and other artist information from those locations within 10 days of an artist's request. Assembly Floor.

Service Contractors

AB 1669 would extend to contractors and subcontractors who submit bids for contracts for the collection and transportation of solid waste the existing 10% bidding preference for public transit service contractors and subcontractors who agree to retain employees of the previous contractor for a period of at least 90 days. The bill is sponsored by the California Teamsters Public Affairs Council.  Senate Appropriations.

Stalled or Dead Bills

Bills can rise from the dead in the last month of the session, but at least for now, bills requiring advance scheduling of retail workers (AB 878), restricting binding arbitration in employment disputes (AB 2667; AB 2879; SB 1241), providing for new parental leave (SB 1166), or expanding leave for school purposes (AB 2405), appear to be finished for this legislative year.

What's Next?

New chair of Assembly Labor & Employment Committee

On July 1, Assembly Speaker Anthony Rendon removed Assemblymember Roger Hernández (D-West Covina) as chair, and as a member, of the Assembly Labor and Employment Committee. First-term Committee member Tony Thurmond (D-Oakland) was named the replacement chair of the Committee.

Initiatives

Voters will become legislators in the November general election by voting on a wide variety of policy proposals. These ballot initiatives include:

• Legalizing marijuana (Proposition 64).
• Eliminating the death penalty (Proposition 62), and reforming the death penalty (Proposition 66).
• Reforming portions of the state legislative process ("California Legislature Transparency Act") to require that bills be in print and available online at least 72 hours before being voted on (Proposition 54).
• Restricting sales of firearm ammunition (Proposition 63).
• Setting pricing standards for state prescription drug purchases (Proposition 61).
• Using condoms in adult film production (Proposition 60).

Two initiatives that had already qualified for the November 2016 ballot were withdrawn by their proponents. One would have capped compensation of hospital executives (Initiative 15-0111); the other would have increased the minimum wage (15-0032).

There will also be a variety of local initiatives, depending on the county or city.  For example, San Jose voters will pass judgment on the "Opportunity to Work" ordinance, which would require city employers to offer additional work hours to existing qualified part-time employees before hiring new staff.⁴

Referendum

There will be a referendum (Proposition 67) seeking to overturn the bill signed into law prohibiting grocery and certain other retail stores from providing single-use bags.

The text of the propositions and the referendum are available here.

Voter Instruction

There will be an unusual "voter instruction" on the statewide November ballot.  Voters will be given the opportunity to decide whether they wish California's elected officials to use all of their constitutional authority, including proposing and ratifying one or more amendments to the United States Constitution, to overturn the 2010 U.S. Supreme Court decision Citizens United v. Federal Election Commission, and other applicable judicial precedents.

Legislative Elections

Finally, state voters will also select California's newest U.S. Senator, 53 members of the House of Representatives, 20 state senators, and 80 assemblypersons. 

Because of the "top two" primary process, for the first time in California history, there will be only two Democrats (and no Republican) on the statewide ballot for the U.S. Senate seat.  In 28 congressional or state legislative contests, there will be two Democrats only (86% of the "one-party" runoffs), or two Republicans only (14%).  The results of the primary show California's deep blue (Democratic) tendency.

In one contest (Assembly District 32), there will be three candidates, as the two second-place candidates tied with 32 write-in votes each, to challenge the incumbent.

Footnotes

1 For an example of how quickly the California Legislature can act in the last month of the annual session, see last year's legislative summary, available  here, footnote 6 (using the "gut-and-amend process," a new bill was introduced and signed by the Governor in 13 days). In an attempt to avoid this 11th-hour process, Proposition 54 on the November 2016 ballot would require the final version of the text of a bill to be in print and available online for at least 72 hours before a vote could be taken on it.

2 See  Christopher E. Cobey and Sebastian Chilco,  California Raises its Minimum Wage and Expands Paid Sick Leave, Littler ASAP (Apr. 4, 2016). The Legislature amended it and passed it through committees and each house within 96 hours.

3 Christopher E. Cobey,  California Legislative Update, Littler ASAP (May 16, 2016).

4 http://www.sanjoseca.gov/index.aspx?nid=5163.

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