2014 New Laws
||As the calendar flips to 2014, it's a good time to make sure you are up-to-date with the new laws, regulations, court cases, agency actions and local ordinances - many of which will impact California employers’ day-to-day operations and policies. These updates are organized by topic below to help you understand your responsibilities and learn how they will impact your business. |
Also, check the Required Posters and Pamphlets page to make sure you are compliant.
Legislation and Regulations
Poster and Notice Updates
- There are mandatory changes to the Department of Fair Employment and Housing’s (DFEH) discrimination and harassment notice.
- The California minimum wage increases to $9.00/ hour on July 1, 2014. All California employers must post the new version of the poster.
- Employers in San Francisco must post a notice informing employees of their rights under the new Family-Friendly Workplace Ordinance.
- Obtaining Criminal History:
- SB 530 amends Labor Code section 432.7 to prohibit an employer from asking any applicant to disclose, or from considering as any condition of employment, information concerning a conviction that has been judicially expunged, sealed, or dismissed. Certain exceptions apply, such as when the employer is required by law to obtain that information.
- A state or local agency is prohibited from asking an applicant to disclose information regarding a criminal conviction until after the agency determines the applicant meets minimum employment qualifications.
- Minimum Salary for Exempt Employees - The California minimum wage rate increases, thus affecting the minimum salary for exempt employees, effective July 1, 2014.
- Validity of Documents - California enacted a series of immigration protections. California enacted protections for workers against "unfair immigration practices" that are taken in retaliation for exercising rights protected under the California Labor Code.
- Driver’s License for Undocumented Immigrants - A law passed in 2013 (AB 60) requires the California Department of Motor Vehicles (DMV) to issue a driver's license to an undocumented person who can prove identity and California residency and meet all other licensing requirements. This law does not take effect until January 1, 2015, or on the date the DMV's director executes a specific declaration, whichever is sooner.
- Exempt Employees Receive Pre-Determined Amount - A California court of appeal ruled that an insurance adjuster who was paid hourly and did not receive a pre-determined amount per pay period was not paid on a salary basis and was not exempt.
- Beware of Managers Performing Nonexempt Duties - A California court ruled that a manager who performed various nonexempt duties while simultaneously supervising staff was not primarily engaged in the performance of exempt work and was entitled to ovrtime.
- Penalties for Incorrect Completion of Form I-9 - The Ninth Circuit Court of Appeals upheld $172,000 in fines against an employer who failed to correctly complete the Form I-9.
- The California Common-Law Right to Control Test:
- A court held that a company can set objectives and minimum standards for an independent contractor, without losing independent contractor status.
- A court of appeal found that an accountant, classified as an independent contractor, was actually an employee.
- Interns - A federal court ruled that two unpaid production interns on the set of a movie actually "worked as paid employees" and the production company misclassified them as unpaid interns. The case serves as a strong caution for employers about using interns.
- Volunteers - A California court ruled that the protections of the Fair Employment and Housing Act do not extend to volunteers.
- EEOC Guidance on Criminal Background Checks - A federal district court criticized the EEOC in a lawsuit involving background check practices and criminal history, finding that the EEOC must isolate the discrete hiring practice that led to discrimination.
- Required Health Care Notice - The Affordable Care Act (ACA) set a deadline of October 1, 2013, for certain employers to provide health care notices to employees.
- Small-Employer Tax Credits - Beginning in 2014, the small employer tax credit is available only for qualified health plan coverage purchased through an exchange or "marketplace" such as Covered California.
- FSA Contribution Limit - The IRS announced that, under specific circumstance, it was now allowing employees to rollover up to $500 of the previous Flexible Savings Account (FSA) plan year's unused contributions into the next plan year.
- 2015 Changes — Employer Mandate - The U.S. Department of the Treasury announced the delay of the effective date of the employer mandate and the implementation of related ACA information reporting requirements until 2015.
- Health Savings Accounts - There are a number of changes in 2014 to rates related to high-deductible health plans.
- Minimum Wage - New legislation raises California's current minimum wage of $8 per hour by two, one-dollar increments, beginning July 1, 2014.
- Wage Order Enforcement and Penalties - Existing law allows the Labor Commissioner to issue a citation for a minimum wage violation and recover the civil penalty and wages. In 2014, the Labor Code was amended to expand the penalty for a citation to include payment for liquidated damages.
- Complaints and Appeals to Recover Unpaid Wages - A new law provides that once an order to recover unpaid wages becomes final, a lien is created and the Labor Commissioner has the authority to record a certificate of lien on the employer's real property.
- Protection for Reporting Labor Code Violations:
- Labor Code section 98.6 specifically protects an employee who brings a written or oral complaint that he/she is owed unpaid wages
- An employer who violates Labor Code section 98.6 is liable for a civil penalty of up to $10,000 per employee for each violation, in addition to any other available remedies.
- Requirements for Specific Industries -
- Requirements for Domestic Service:
- Over the next two years, federal and state laws will affect the obligations of private households who have domestic work employees — and also agencies that provide such in-home helpers.
- Under the new Domestic Worker Bill of Rights, overtime is now extended if the employee is a "domestic work employee who is a personal attendant."
- The Domestic Worker Bill of Rights became effective on January 1, 2014 and will remain in effect until January 1, 2017, at which time the California legislature will decide whether to renew it.
- Requirements for the Garment Industry - A garment manufacturer's failure to display his/her name, address and registration number at the front entrance of the premises will result in a civil penalty.
- Requirements for the Car Wash Industry - Effective January 1, 2014, the surety bond amount for employers in the car wash industry is now $150,000.
- Requirements for Farm Labor Contractors - Successor farm labor contractors are liable for wages or penalties owed by a predecessor farm labor contractor.
- Requirements for Government Contractors - A new law was added prohibiting charter cities from using or receiving state funds or financial assistance for construction projects if the city authorizes non-compliance with prevailing wage provisions on any public works contract.
- Deductions Overview - It is a crime for an employer to fail to remit withholdings from an employee's wages that were made pursuant to state, local, or federal law (such as payroll taxes).
- Premium Pay for Break Violations - An employer with employees who work outside cannot require an employee to work during any "recovery period" taken to avoid heat-related illness.
- On-Call Resident Employees - A California court of appeal case discussed how to handle on call time when security guards were required to stay overnight on an employers premises.
- Employer Liability for Employee Actions During Commute:
- In a potential expansion of employer liability, a ruling from a California Court of Appeal has allowed a case to proceed to trial against a company whose employee injured a motorcyclist during her commute home.
- Another California court ruled that when an employee runs a personal errand that is so lengthy as to be unforeseeable, the employer will not be liable for an accident that occurs during the errand.
- Piece Rates - In 2013, California courts issued decisions on piece rate compensation plans that affect what can be included in the piece rate pay. Employers with piece rate plans should also review their plans to ensure separate compensation for rest breaks.
- On-Duty Meal Breaks - The Ninth Circuit Court of Appeal called into question whether an on-duty meal period exception can be used by an employer who chooses to have only a single person, when they could hire a relief person.
- San José Minimum Wage - The minimum wage in San José increased from $10.00 to $10.14 per hour, effective January 1, 2014.
- San Francisco Minimum Wage - Effective January 1, 2014, the San Francisco minimum wage increases to $10.74 per hour.
- San Francisco Family-Friendly Workplace Ordinance - San Francisco passed a Family-Friendly Workplace Ordinance that requires employers with employees working in San Francisco to consider employee requests for "flexible or predictable working arrangements to assist with care giving responsibilities."
- Leave for a Qualifying Exigency - Final regulations took effect on March 8, 2013, implementing expanded protections for qualifying exigencies under the National Defense Authorization Act.
- Military Caregiver Leave (FMLA Only) - The National Defense Authorization Act for Fiscal Year 2010 expanded the military caregiver leave protections. Final regulations took effect on March 8, 2013.
- Calculation Method for Flight Crews - An airline flight crew employee is entitled to 72 days of leave during any 12-month period for FMLA-qualifying reasons other than military caregiver leave and 156 days of leave during a single 12-month period for military caregiver leave.
- Reasonable Accommodation Beyond PDL - A California court of appeal reached the same conclusion as the Government Code regulations, ruling that an employee who used her entire four months of PDL may still be entitled to additional leave under the Fair Employment and Housing Act (FEHA).
- Notice Requirements - The Federal Family and Medical Leave Act Poster - Notice C was updated by the U.S. Department of labor with a revision date of February 2013.
- Family Care (FMLA/CFRA) - Under the FMLA, an employee who resides in California can now take time off to care for a same-sex spouse with a serious health condition.
- Whistleblower Protections - The Labor Code was amended to expand California whistleblower protections.
- Military and Veteran Status - The Fair Employment and Housing Act was amended to add "military and veteran status" to the list of categories protected from employment discrimination.
- Unfair Immigration-Related Practices - New California protections will address retaliation against immigrant workers who complain about unfair wages or working conditions.
- Reporting or Threatening to Report Immigration Status:
- In addition to the protections against unfair immigration-related practices found in the newly added Labor Code section 1019, the California legislature added additional measures to prevent retaliation based on an employee's citizenship or immigration status.
- The Penal Code was amended to clarify that a person may be guilty of criminal extortion if the person threatens to report the immigration status or suspected immigration status, of an individual or his/her relative.
- Affirmative Action and Federal Contractors and Subcontractors - In 2013, the U.S. Department of Labor's Office of Federal Contract Compliance Programs announced two Final Rules expanding the obligations of federal contractors and subcontractors to take affirmative action to recruit, hire, promote, and retain individuals with disabilities and veterans.
- Liability Limited In Mixed Motive Cases - The California Supreme Court recently issued a significant ruling on the issue of liability in discrimination cases brought under the Fair Employment and Housing Act (FEHA).
- Mixed Motive Cases - The California Supreme Court ruled that an employee in a discrimination lawsuit bears the burden of showing that discrimination is a "substantial motivating factor" in the adverse action taken against the employee.
- "But-for" Test - The U.S. Supreme Court ruled that in retaliation lawsuits under Title VII, complaining parties must prove that the employers would not have taken action against them "but-for" the intention to retaliate — a stronger test than needing to show that retaliation was one of many motivating factors.
- Sarbanes-Oxley Whistleblower Protection - An important case is currently pending before the U.S. Supreme Court as to whether Sarbanes-Oxley whistleblower protections should be extended to private companies serving under contract as advisers to public companies.
- Marital Status- California now recognizes same-sex marriages as lawful. Moreover, the United States Supreme Court has ruled that defining the term "spouse" under federal law to exclude same-sex unions is unconstitutional and violates the equal protections afforded by the Fifth Amendment of the Constitution.
- Reasonable Accommodation and Religion - A federal judge ruled that a clothing retailer discriminated against a Muslim employee when the company failed to accommodate her wearing of a religious head scarf at work.
- California Law and Sexual Harassment - A law was enacted that amends the definition of harassment under FEHA to specifically clarify that sexually harassing conduct does not need to be motivated by sexual desire to be considered unlawful.
- Retaliation Claims Can Proceed Even When Harassment Claim Fails - The Ninth Circuit Court of Appeal ruled that an employee who brings a claim or participates in an investigation is protected against retaliation, even if the underlying harassment claim turns out to be meritless.
- Who Is a "Supervisor"? - The U.S. Supreme Court decided an important case that determines who is a "supervisor" for purposes of employer liability in federal harassment cases brought under Title VII.
- Conducting Appropriate Sexual Harassment Investigations - A California court ruled that an at-will manager could be terminated for being uncooperative and deceptive during the company’s investigation of a discrimination claim against him.
- Recovery Period - The law which provides that an employer must not require an employee to work during a meal or rest period is expanded to also include a "recovery period" taken to avoid heat-illness.
- Alcohol at Workplace Functions - A recent California case should serve as a stark warning to employers that they can be reliable for an employee's drunk driving accident — even if the accident occurs after the work function is over.
- Death Benefits - The continuing death benefit is payable to the totally dependent minor child regardless of whether there is a surviving parent who is also a total dependent.
- Mandatory Utilization Review - Independent Medical Review (IMR) is the exclusive avenue for the employee to appeal a denial or modification of treatment for all injuries.
- Injuries Occurring on or After January 1, 2013 - For injuries dated after January 1, 2013, any permanently partially disabled worker is entitled to a voucher of up to $6,000 unless the employer makes an offer of regular, modified or alternative work that meets specified criteria.
- Information Protected by HIPAA - The HIPAA/HITECH Omnibus Final Rule went into effect in 2013 with most changes becoming mandatory September 23, 2013.
- Keeping Medical Information Private - A California court of appeal clarified that an employee may bring a lawsuit against an employer who publicized a private medical condition by discussing it with employees who did not need to know the information.
- Employer Investigations - The NLRB issued guidance on employee investigation and confidentiality rules, stating that the Employer cannot maintain a blanket rule regarding the confidentiality of employee investigations, but must demonstrate its need for confidentiality on a case-by-case basis.
- Key NLRB Decisions - The NLRB continues to rule against employers that take adverse action against employees who post negative comments about their workplace on social media websites.
- Representation and Election Process - The proposed changes and final rule regarding the representation and election process is still in flux.