New Laws for California Employers
There are several new laws that go into effect January 1st. Among these are some changes to employment practices for California employers in the areas of employee family leave, job applications, interviews, background checks, and compensation.
SB 63: Parental Leave Expansion
As the law stands today, under both California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA), employers with 50 or more employees in a 75-mile radius must offer qualified employees up to 12 weeks of parental leave for a child’s birth, an adoption, or foster care placement. The new law, known as “The New Parental Leave Act,” will extend such parental bonding rights to employees in small companies. As of the first of the year, parental leave will apply to California employers with 20 to 49 employees in a 75-mile radius.
Employees are required to take and complete the leave within one year of the child’s arrival—although leave may be taken intermittently. To be eligible for New Parental Leave, an employee must be employed by his or her current employer for more than 12 months and have worked for the employer at least 1,250 hours during the previous 12-month period.
The law does consider the potential for unintentional mistakes by small employers: it establishes a mediation pilot program that lets California employers request mediation within 60 days of receiving a right-to-sue notice for alleged violations of this new law. A lawsuit can’t be filed until mediation is completed (The pilot program will be in place until January 1, 2020).
AB 1008: Ban-the-Box Law
On October 14th, California Governor Jerry Brown signed into law AB 1008, the “California Fair Chance Act,” which is one of the strongest state laws in the country extending “ban the box” to private employers. Any employers with at least five employees can’t inquire into criminal record or conduct background checks until after extending a conditional offer of employment—a significant change from current law that permits these types of inquiries.
California will be the 10th state to require both public- and private-sector employers to delay background checks and inquiries about job applicants’ conviction records until they have made a conditional job offer to the applicant.
The new law is designed to provide convicted felons a “fair chance” to obtain employment. When a conditional offer has been extended, an employer can then withdraw the offer because of a criminal record—but only if the employer can demonstrate that there’s a direct and adverse relationship between the conviction and specific job function.
There are also specific procedural and notification requirements.
A violation of this law would be discrimination and could result compensatory and punitive damages and attorney’s fees.
AB 168: Salary Inquiry Ban
All California employers, regardless of size, who employ California employees can’t ask California applicants about salary history, including compensation and benefits.
In addition, the new law prohibits gathering this information through third parties, like recruiters. This law coincides with the California Fair Pay Act (CFPA), which was enacted to eliminate pay disparities based on past gender and race discrimination. The CFPA stipulates that job duties must determine pay, rather than salary history, race, or gender. An applicant can voluntarily disclose his or her salary; if that occurs, the potential employer may consider that information to set that applicant’s salary, but salary history alone can’t be used to justify a pay disparity for “substantially similar work” under the CFPA.
This law also mandates the disclosure of the salary range for the position applied for if an applicant requests it.
Now is the time to review and update company policies, handbooks, and required postings. Employers should also revise their application forms and delete inquiries about salary history. Consider training for applicable personnel like managers and HR employees.
Andrew Rogerson specializes in helping business owners buy and sell businesses. His services include business valuations, marketing the business, negotiating the transaction as well as third-party lending, due diligence and escrow. Andrew is the author of four books on business ownership which you can find here. For more information you can visit our subpage for selling a business or call Andrew Rogerson directly at (916) 570-2674.