NEW EMPLOYMENT LAWS FOR 2017
By BPE Law Attorney Elizabeth Arias
Governor Brown signed several new laws this year impacting California employers, some of which have already gone into effect and others that will be effective or operative in 2017 or later. Following is a summary of five new laws affecting California employers.
(1) Minimum Wage Increase
As of January 1, 2017, businesses with 26 or more employees must pay a minimum wage of $10.50 per hour; the rate increases to $15.00 per hour in 2022. Smaller businesses (with 25 or fewer employees) will be required to pay the higher rates starting in 2018. In addition, the United States Department of Labor has increased the salary and compensation levels necessary for employees to be exempt from the federal Fair Labor Standards Act (eff. Dec. 1, 2016). The new federal salary threshold of $47,476 is more than double the current federal threshold of $23,660. Importantly, it is also higher than California’s minimum annual salary threshold, which is currently $41,600 (calculated at two times the state minimum wage). This means that California employers will need to either adjust salaries for their exempt employees to meet this new threshold or reclassify these employees as non-exempt.
(2) Equal Pay Act Expanded
In 2015, the Legislature enacted significant amendments to California’s Equal Pay Act (Labor Code § 1197.5) to address gender wage inequality. This year, the Legislature enacted additional amendments to the statute prohibiting wage inequality based on race or ethnicity for substantially similar work. (SB 1063.) Additionally, the Legislature enacted a further amendment specifying that an employee’s prior salary cannot, by itself, justify any disparity in compensation. (AB 1676.)
(3) California Requires Single-Occupancy Restrooms to be “All Gender”
On September 29, 2016, California Gov. Jerry Brown signed A.B. 1732, which requires all single-user restroom facilities in any business establishment, place of public accommodation, or government agency to be identified as “all gender” facilities rather than being designated as male- or female- only. The law authorizes public inspectors or building officials to inspect facilities for compliance with this law. The new law goes into effect March 1, 2017. Businesses should immediately look into whether their single-occupancy restrooms need to be re-designated in compliance with the new law.
(4) Restriction on Choice of Law in Employment-Related Agreements
SB 1241 prohibits employers from requiring employees who primarily reside and work in California to agree to a provision in either an employment agreement or a separation or settlement agreement that would mandate resolving a claim (a) in a forum outside of California or (b) according to the laws of a state other than California if such a requirement would deny the employee a substantive protection of California law. Any contractual provision that is inconsistent with this law is voidable by the employee, and the employee is entitled to recover attorney’s fees incurred to enforce his or her rights. This new law applies only to contracts entered into, modified, or extended on or after, and does not apply to contracts where the employee is individually represented by legal counsel during negotiations. This law is likely to have the greatest impact on employers headquartered outside of California, who may wish to have disputes resolved in and according to the law of the state where the home office is located.
(5) Notice to Employees of Rights Concerning Domestic Violence/Stalking
Existing law prohibits an employer with 25 or more employees from discharging, discriminating, or retaliating against an employee who is a victim of domestic violence, sexual assault, or stalking because he or she takes time off from work to address the situation. AB 2337 requires that employers provide written notice of these rights to new employees upon hire, and to current employees upon request. The law obligates the Labor Commissioner, by July 1, 2017, to develop and post on its website a form notice that employers can use to satisfy this requirement. The employer’s obligation commences at the time the Labor Commissioner posts the form, but no later than July 1, 2017.
What can employers do to get ready?
- Review pay practices to identify potential disparities based on race and ethnicity, as well as gender.
- Ensure that applications do not elicit information on prior salary.
- Obtain and install appropriate signage for single-user restrooms.
- Make sure that human resources staff, hiring managers, and supervisors understand the changes affecting them.
- Consult with legal counsel to ensure their policies are compliant and their employee handbooks are up to date.
For over 20 years, the attorneys of BPE Law Group have been serving the legal needs of our clients wherever they may be and as complex and unique as the situation may demand.
This article is not intended to be legal advice, and should not be taken as legal advice. Every case requires review of specific facts and history and a formal agreement for service. Please feel free to contact us if you need legal advice and are interested in seeing if we can help you.