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What Changes Are In Store For California Employers in 2018?

December 21, 2017 Michael Warren

As 2017 draws to a close, now is an opportune time for California employers to review the new employment laws scheduled to take effect in 2018 and ensure compliance.  As with past years, the new crop of employment laws are numerous and wide-ranging. Below is a summary of some of the key laws that will impact employers in 2018.

Minimum Wage Increase

Starting January 1, 2018, the state minimum wage increases to $10.50 per hour for employers with 25 or fewer employees and to $11.00 per hour for employers with 26 or more employees.  These increases are part of SB 3, which was signed into law in 2016.

The law provides that for employers with 26 or more employees, the minimum wage will increase by $1 until it reaches $15.00 per hour in 2022.  For employers with 25 or less employees, the minimum wage will be $11.00 in 2019 and then increase by $1 each year until it reaches $15.00 per hour in 2023.

Please be aware that many cities in California have their own minimum wage requirements that exceed the state’s requirements.  Take time to check whether the cities where your organization operates have their own minimum wage ordinances. 

New Parent Leave Act

SB 63 (New Parent Leave Act) requires employers with 20 or more employees to provide eligible employees with up to 12 weeks of bonding leave with a new child within one year of the child’s birth, adoption, or foster care placement.  Employees are eligible for the parental leave if they meet the following requirements:

  • Worked for the employer more than 12 months;
  • Worked at least 1,250 hours during the prior 12-month period; and
  • Worked at a worksite where there is at least 20 employees within a 75 mile radius.

The Act covers all employers in California with 20 or more employees, however, it will have the greatest effect on employers with 20 to 49 employees who are not currently required to provide parental leave under the Family Medical Leave Act (FMLA) or the California Family Rights Act (CFRA).  Under the Act, employers must maintain and pay for the continued healthcare coverage of the employee while on leave, and guarantee reinstatement to the same or comparable position upon the employee’s return from leave.

Salary History Questions

Under AB 168, employers are now prohibited from asking for a job applicant’s salary history during the hiring process.  Employers also cannot seek an applicant’s salary history through an agent or third party.

The law prohibits employers from relying on salary history information as a factor in determining whether to offer employment or what salary to pay the applicant.  If an applicant, however, voluntarily provides his/her salary history without prompting, the employer may consider that information.  Upon reasonable request from the job applicant, employers must also provide the applicant with the pay scale for the position sought.

Starting January 1, 2018, employers in California must ensure that their job applications and other hiring forms do not include any questions that request or prompt the applicant to disclosure salary history information. 

“Ban-the-Box” Law

AB 1008 prohibits employers from seeking criminal history information on job applications and from inquiring about or considering an applicant’s conviction history before making a conditional offer of employment.  An employer may seek certain criminal history information only after a conditional offer of employment is given to the job applicant.  However, arrests that did not result in a conviction, sealed or expunged convictions, and juvenile crimes still may not be considered. 

Once a criminal history is obtained, an employer cannot deny an applicant a position solely, or in part, on a conviction history without the employer first performing an “individualized assessment.”  The law sets forth specific factors to be considered in making the assessment.  

If, based on the individual assessment, an employer decides that the applicant’s criminal history is disqualifying, (before a final decision can be made) the employer must notify the applicant of the decision in writing through a specific notice process detailed in the law.  California employers should ensure that their job applications or other initial hiring forms comply with this new law.

Gender Identity and Expression Harassment Training

SB 396 requires that California employers with 50 or more employees include in their bi-annual harassment training program a discussion about preventing harassment based on gender identity, gender expression, and sexual orientation.  The new law also requires that a poster on transgender rights developed by the DFEH be displayed in the workplace.

Workplace Immigration Protection

AB 450 (The Immigrant Worker Protection Act) is intended to protect workers from immigration enforcement while on the job as part of a group of laws designed to create a “sanctuary state.”  The law prohibits employers from (1) providing federal immigration enforcement agents access to nonpublic areas of a business without a warrant, and (2) providing agents access to employee records without a subpoena or warrant, expect for Form I-9 inspections which require specific procedures be followed.

An employer that improperly provides access to federal immigration agents or fails to follow the specific requirements for Form I-9 inspections can be subject to significant fines.

Construction Contractors Wage Liability

AB 1701 makes general contractors responsible for any unpaid wages, benefits or contributions that a subcontractor owes a worker for work performed under the contract.  The law applies to contracts entered into on or after January 1, 2018.  The law also requires subcontractors to provide payroll records to general contractors upon request to confirm wages and other benefits are being properly made.  General contractors may establish protections in the contract for liabilities incurred on behalf of subcontractors.  Therefore, it is important that general contractors incorporate appropriate indemnification provisions to mitigate any potential liability caused by a subcontractor’s failure to comply with wage and hour laws.

If you have questions about any of these new laws or how they may impact your organization, consult your attorney.