California Employment Law Update – May 2018

California

FEHA and National Origin Discrimination

On May 17, 2018, the California Office of Administrative Law approved the California Fair Employment and Housing Council’s new amendments to the state’s Fair Employment and Housing Act regarding national origin discrimination and employment. The new amendments:

  • Clarify the definitions of national origin and national origin groups.
  • Clarify permissible and prohibited types of employer policies governing English proficiency, accent, and language spoken in the workplace.
  • Clarify permissible and prohibited inquiries regarding immigration status.
  • Detail prohibited forms of harassment in the context of national origin.

The new amendments are effective July 1, 2018.

Read the law

San Francisco Paid Sick Leave Rules

On May 7, 2018, the San Francisco Office of Labor Standards published new rules reinterpreting the city’s Paid Sick Leave Ordinance (PSLO) with the following changes:

  • Setting the standard for coverage as applicable to employees working 56 hours in the city and removing a reference to working in the city “on an occasional basis.”
  • Joint employment terms are defined in relation to PSLO applicability.
  • Verification or documentation disclosure protections for employees are modified by requiring no more than is necessary for an employer to determine if the absence is lawful.
  • The notice requirements are modified to require what is presumptively reasonable for pre-scheduled or foreseeable absences.
  • An employee’s regular rate of pay is calculated according to state law (Cal. Labor Code § 510) where previously the calculation was undefined.
  • The basis of an employee’s exempt status is confirmed; however, the rule provides that if an exempt employee was not provided any other paid leave, and sick leave is taken, then his or her salary continues without deduction for the sick time taken, but the leave balance is reduced.
  • The waiting period requirement was modified for employees who are rehired within one year by permitting their original employment period to apply to its fulfillment.
  • Clarifications as to how the PSLO applies to a unionized workforce and collective-bargaining agreements.
  • Modification of remedy calculations and issue resolution timeframes for noncompliant employers.

The new rules are effective June 7, 2018.

Read the rules

Los Angeles Minimum Wage

The City of Los Angeles released its updated local minimum wage poster. Effective July 1, 2018, and under the city’s minimum wage ordinance, Los Angeles employees must be compensated as follows:

  • $12 per hour for employers with 25 or fewer employees.
  • $13.25 per hour for employers with 26 or more employees.

This notice also provides information about the city’s paid sick leave provisions and must be posted in a conspicuous place at any workplace or jobsite. Violators are subject to penalties.

See the poster

San Leandro Minimum Wage

Effective July 1, 2018, the City of San Leandro’s minimum wage increases to $13 per hour. The city released a new poster reflecting this new rate along with the other rate increases that take effect each July 1st through year 2020.

See the poster

Santa Monica Minimum Wage

The City of Santa Monica released its updated local minimum wage poster. Effective July 1, 2018, and under the city’s minimum wage ordinance, every Santa Monica employee (part time or full time) who works at least two hours in a particular work week within the geographic limits of the city must be paid no less than:

  • $12 per hour for employers with 25 or fewer employees.
  • $13.25 per hour for employers with 26 or more employees.

The city’s hotel worker living wage also increased, as listed in the poster, to $16.10 per hour effective July 1, 2018.

See the poster

San Francisco Minimum Wage

On July 1, 2018, the San Francisco minimum wage will increase to $15 per hour. The city released an updated minimum wage poster reflecting the 2018 rate, which must posted by San Francisco employers at each workplace or jobsite.

See the poster

Redwood City Minimum Wage

On April 10, 2018, Redwood City Mayor Ian Bain signed a city minimum wage ordinance (No. 2443) requiring Redwood City employers to pay the following minimum wages:

  • $13.50 per hour effective January 1, 2019.
  • $15 per hour effective January 1, 2020.

Under the ordinance, learner employees must be paid no less than 85 percent of the applicable minimum wage for the first 160 hours of employment and then must be paid the applicable minimum wage. Additionally, employers may not deduct any tip or gratuity (or credit any tip or gratuity) to offset an employee’s wages.

Beginning on January 1, 2021, and each year thereafter, the city’s minimum wage will increase by an amount corresponding to the prior year’s increase in the cost of living, if applicable. The cost of living increase will be measured by the percentage increase in the Consumer Price Index (CPI) for San Francisco-Oakland-San Jose. The increase will be calculated by using the August-to-August change in CPI; however, a decrease in the CPI will not result in a decrease in the minimum wage.

The ordinance also provides the following:

  • Posting requirements.
  • Retention of payroll records for three years.
  • Retaliation prohibition.
  • Exceptions.
  • Violations, enforcement, and penalties.

The ordinance became effective May 10, 2018.

Read the ordinance

Belmont Minimum Wage

The City of Belmont updated its minimum wage rate official notice to reflect the city’s minimum wage increase to $12.50 (tips not included) per hour for employers who are subject to the Belmont Business License Tax, or who maintain a facility in Belmont, and have an employee who works at least two hours per week in the city.

The rate is effective July 1, 2018.

See the notice

Pasadena Minimum Wage

The City of Pasadena updated its minimum wage rate official notice to reflect the city’s minimum wage increase to $13.25 (in addition to any tips received) per hour for employers with 26 or more employees.

The rate is effective July 1, 2018.

See the notice

Independent Contractors, IWC Wage Order Claims, and the ABC Test

On April 30, 2018, the California Supreme Court filed its decision in Dynamex Operations West, Inc. v. Superior Court regarding the proper classification of workers under the California Industrial Welfare Commission’s (IWC) wage order claims. As opposed to employees, independent contractors are not covered by IWC wage orders.

In Dynamex, the court held that there is a presumption that a worker is an employee, and covered under the IWC wage orders, unless a business (hiring entity) can establish that all of the following factors of the “ABC test” are applicable:

  1. The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of such work and in fact;
  2. The worker performs work that is outside the usual course of the hiring entity’s business; and
  3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.

If the business can establish that all parts (A, B, and C) of the test are met then the worker is an independent contractor for IWC wage order claim purposes. The court’s ruling in specifically applies to the analysis of the “suffer or permit to work” definition of “employ” contained in the wage orders when evaluating worker status. The court did not address which test is applicable to claims of misclassification under other California statutes, only to claims under the IWC wage orders.

The decision is effective as of April 30, 2018.

Read the decision