California Special Edition Newsletter – January 2017

by Kathryn Carlson on January 4, 2017

There are a number of new employment regulations and laws that are effective January 1, 2017, specific to California employers. KPA has updated the HRDrive™ system where appropriate to comply with these changes. The information presented below offers general guidance concerning the employment-related rules, regulations, and updates to the KPA HRDrive™ content or features. It is provided with the understanding that KPA is not engaged in rendering any legal opinions. KPA HRDrive™ clients may contact KPA partner attorneys directly by accessing the “HR Advice” tab within the software program.

If you have any questions, please contact our Client Success Center at 1-866-539-4718 or email [email protected].



Electronic Filing Requirements

Beginning January 1, 2017, employers with 10 or more employees must electronically submit employment tax returns, wage reports, and payroll tax deposits to the EDD. All remaining employers will be subject to this requirement beginning January 1, 2018. For additional information go to: www.edd.ca.gov/EfileMandate.

Legalized Recreational Use of Marijuana – Proposition 64

Proposition 64 does not stop enforcement of current workplace safety and drug prevention policies. The use of recreational use of marijuana in California is now legal, however marijuana will still remain an illegal substance under federal law. Therefore, employers may continue to prohibit use, possession and impairment at work, and may continue to use lawful testing procedures. If you have any questions regarding your current policies, please contact your assigned attorney partner via the HR Advice tab within the system or contact the Client Success Center 1-866-539-4718 or email [email protected].

Adjudication Claims outside California – SB 1241

  • Makes any arbitration clause void if the claim of a CA employee is adjudicated outside of CA or applies a law other than CA law
  • To protect their rights, employee may file a claim for injunctive relief, and receive attorney fees and costs
  • This prohibition does not apply if the employee is represented by legal counsel during the negotiation of the employee agreement

Transcription by Certified Shorthand Reporter – SB 1007

  • Grants the right to a party to an arbitration to have a certified shorthand reporter transcribe any deposition, proceeding, or hearing as the official record

Additional Information on Arbitration

ln a recent decision, the Federal Ninth Circuit Court of Appeals in the case of Morris v. Ernst & Young, held that the use of mandatory class action waivers in arbitration agreements violates the National Labor Relations Act. California employers may not be able to enforce arbitration agreements where employees are giving up the right to bring or participate in a class action lawsuit.
KPA has updated the arbitration language on the online employment application, employee handbook certification, and the At-Will Employment and Arbitration Agreement form for all clients on the advice of our attorney. If you would like customized language on your employment application or on a document, please contact the Client Success Center for assistance.

Minimum Wage Increase – SB 3

  • Gradually raises the Minimum Wage to $15 by 2022
    • January 1, 2017 $10.50 per hour
    • January 1, 2018 $11.00 per hour
    • January 1, 2019 $12.00 per hour
    • January 1, 2020 $13.00 per hour
    • January 1, 2021 $14.00 per hour
    • January 1, 2022 $15.00 per hour
  • One-Year Lag for employers of 25 or fewer employees
    The Toolkit section has been updated with the most current version of wage orders/notices.

Labor Commissioner Citation Appeals – AB 2899

  • Appeals of Citations for Minimum Wage Violations requires a bond to cover Minimum Wages, Liquidated Damages, Overtime Compensation
  • Failure to pay within 10 days will forfeit entire bond
    In the event of a Department of Labor citation please contact legal counsel immediately. For advice on how to respond to a citation select the “HR Advice” tab and then email or call your assigned attorney.

Hands-Free Devices – SB 1785

  • Prior law required hands-free operation of wireless communication devices for text-based communications. The new law allows for communication if the device is mounted or affixed to a window, console or dashboard in a way that the view of the road is not hindered; and the driver must be able to activate or deactivate the feature or function of device with a single swipe or tap of the finger.

KPA recommends that you review your current policy and update as appropriate.
Please send any updated policies to [email protected] if you would like them included in your system. If you would like a sample policy – please let us know.

Pay Stubs Requirements for Minimum Wage and Overtime Exempt Employees – AB 2535

  • Employees exempt from minimum wage and overtime no longer require hours logged on a pay stub
    Continue to require hourly and commissioned employees to clock in and out for start and end times and for meal periods. Remember that employees will continue to get rest periods.

Salary Discrimination – Prior Salary Information – AB 1676

  • Employers are now prohibited from considering prior salary as the sole justification for any disparity in compensation due to gender, ethnicity and/or race

KPA has updated the online employment application to remove any questions regarding prior salary. We also recommend that you review pay plans to confirm that there no disparities based on prior salary. If there are pay plan disparities among employees in similar or comparable positions, you must use additional factors in addition to (or instead of) prior salary to justify distinctions.

Salary Discrimination – SB 1063

  • The Equal Pay Act from last year prohibited disparity in pay across genders unless justified by listed exceptions such as a valid seniority system, a merit system or a performance system. The new law expands the protections to cover salary disparities across race or ethnic identification.

Please review your compensation programs to ensure that there is no disparity in pay that could be attributed to gender, race or ethnicity.

Domestic Violence, Sexual Assault, Stalking Victims’ Rights – AB 2337

  • Requires employers to inform employees of laws prohibiting discrimination or retaliation against an employee who is a victim of domestic violence, sexual assault, or stalking. Employees are also protected from retaliation if they take off work for purposes related to being a victim of domestic violence.

Once the new form is available from DLSE KPA will update the New Hire packet and the Toolkit. KPA will provide additional information in next month’s newsletter.

Immigration Practices – SB 1001

  • Prohibits employers from requesting more or different documents that federal law requires
  • Documents that reasonably appear on their face to be genuine must be honored
  • Employers cannot refuse work authorization based on specific status or term of status that accompanies authorization to work
  • Employers cannot reinvestigate or re-verify incumbent employee authorization to work

KPA recommends that all employers train staff members responsible for completion of the I-9 form on proper procedures. The newest version of the I-9 form is available in the New Hire packet and in the Toolkit.

Background Checks and Juvenile Crimes – AB 1843

  • Employers may not seek or use information relating to juvenile arrests, detentions and/or court dispositions in making employment decisions. This includes asking for this information on employment applications or in background checks.

The KPA online employment application meets the requirement to not seek this information. All KPA background checking partners are aware of the law and will not provide juvenile arrests, detentions and/or court dispositions in their final background check reports.

Earned Income Tax Credit – AB 1847

  • Requires notification of potentially eligible employees that they may be eligible for federal and state Earned Income Tax Credits

KPA recommends that the notification of federal EITC eligibility is accompanied by notification of California EITC eligibility in the New Hire packet. The default setup of the New Hire Packet includes this information. If you are not sure if your current New Hire Packet includes this information, please contact the Client Success Center to review and update as required.

Smoking in the Workplace – ABX2-7

  • Expands prohibition on smoking in all enclosed places of employment that are structural parts of the building(s) including the following:
    • Covered parking lots
    • Lobbies
    • Lounges
    • Waiting Areas
    • Elevators
    • Stairwells
    • Restrooms
    • E-Cigarettes are included in the prohibition

KPA recommends that you review your current policies on smoking in the
workplace and update as appropriate. Please send any updated policies to [email protected]. If you would like a sample policy, please let us know.
KPA thanks the California New Car Dealers Association and John Boggs of the law firm of Fine, Boggs and Perkins for providing information and guidance included in this alert.

If you have any legal questions after reviewing this information, please contact your attorney or access the “HR Advice” tab in the system. If you have questions regarding the updates to HRDrive or would like to update forms, documents or the online employment application specific to your company, please contact the Client Success Center at 1-866-539-4718 or email [email protected].

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Kathryn CarlsonCalifornia Special Edition Newsletter – January 2017