New laws for businesses

bruce sarchet
Bruce Sarchet

The California Legislature has been busy, and there are important new laws taking effect soon that will impact your business.

Here is a summary of this year’s major legislation.  Unless otherwise noted, all new laws become effective Jan. 1.  As usual, this article does not substitute for the advice of legal counsel.

Minimum wage

On April 4, Gov. Brown signed Senate Bill 3, which will eventually raise the statewide minimum wage to $15 per hour. The amended law provides for six, stepped annual statewide increases of the current minimum wage of $10 an hour. The increases start Jan. 1, for employees working for business of 26 or more employees. The increases are delayed for one year for employers of 25 or fewer employees.

Agricultural industry overtime

Assembly Bill 1066, the “Phase-In Overtime for Agricultural Workers Act of 2016” removes the exemption for agricultural employees regarding hours, meal breaks and other working conditions. It includes specified wage requirements and creates a schedule that phases in overtime requirements for agricultural workers during 2019 to 2022.  The new law amends Labor Code section 554; adds Labor Code sections 857-864.

Equal pay

Assembly Bill 1676 specifies that prior salary cannot, by itself, justify any disparity in compensation between men and women.  Senate Bill 1063 prohibits an employer from paying any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work.  The new law amends Labor Code sections 1197.5 and 1199.5.

Notifications and postings

Assembly Bill 2337 requires employers to inform each employee of his or her employment leave rights as a possible victim of domestic violence, sexual assault, or stalking. The bill also requires the labor commissioner, by July 1, 2017, to post on its website a form that an employer may elect to use to comply with these provisions.

Employers are not required to comply with the notice of rights requirement until the Commissioner develops and posts the form.  The new law amends Labor Code section 230.1.

Employment contract restrictions

Senate Bill 1241 prohibits an employer from requiring a California employee to adjudicate outside of California a claim arising in California. Adjudication includes litigation and arbitration.  A contract with an employee who was represented by legal counsel is exempted from the statute.  The new law adds new Labor Code section 925.

Applicant’s juvenile court history

Assembly Bill 1843 prohibits employers from asking an applicant for employment to disclose information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.

Employers are also prohibited from using such information as a factor in determining any condition of employment.  The new law amends Labor Code section 432.7.

Retirement saving

Senate Bill 1234 establishes the California Secure Choice Retirement Savings Program. Secure Choice will apply to private-sector employers with five or more employees.

Employers will be required to either offer an employer-sponsored retirement plan or to automatically enroll their employees in Secure Choice.  Employers will have minimal administrative responsibilities.

The new law amends, repeals, and adds 20 sections of the Government, and Welfare and Institutions, Codes.

Janitorial industry

Assembly Bill 1978 implements new registration, record-keeping and sexual harassment prevention training requirements for certain janitorial industry employers.  By Jan. 1, 2019, the Division of Labor Standards Enforcement must establish a biennial, in-person sexual violence and harassment prevention training requirement for employees and employers.   The new law adds Labor Code sections 1420 – 1434.

Workplace smoking

SBX2-5 extends workplace smoking prohibitions of tobacco products to include electronic cigarettes.  The new law repealed, amended, and added 25 sections in eight codes.

Unfair immigration-related practice

Senate Bill 1001 makes it unlawful for an employer to request more or different documents than are required under federal law, to refuse to honor documents tendered that on their face reasonably appear to be genuine, or to reinvestigate or re-verify an incumbent employee’s authorization to work. The new law adds Labor Code section 1019.1.

These are a few of the new state laws impacting California workplaces.  In addition, many of California’s nearly 500 cities and 58 counties will likely continue generating their own local employment laws.

Employers in the Central Valley should consider reviewing and updating their employee handbooks and, if necessary, policies and procedures that are affected by these new laws.

Bruce Sarchet is an attorney with the firm of Littler Mendelson and represents employers in labor and employment law matters.  You can contact him at [email protected].


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