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2015 Employment Laws Part 2

Wage and Hour

AB 1723—Wage penalties

An employer who pays less than the minimum wage may be cited with a civil penalty, restitution and liquidated damages. AB 1723 authorizes the labor commissioner to impose "waiting time penalties" for an employer's willful failure to timely pay wages to a resigned or discharged employee.

Intentional violations trigger a citation of $100 for each underpaid employee for each pay period for which the employee is underpaid. This amount is in addition to an amount sufficient to recover underpaid wages, liquidated damages pursuant to Section 1194.2, and any applicable penalties imposed pursuant to Section 203.

For each subsequent violation for the same specific offense, the citation is $250 for each underpaid employee for each pay period for which the employee is underpaid regardless of whether the initial violation is intentionally committed. This amount is in addition to an amount sufficient to recover underpaid wages, liquidated damages pursuant to the above mentioned sections.

AB 1939—Prevailing Wages: Contractor's Costs

Current law requires that contractors and subcontractors performing work on publicly funded construction and maintenance projects to pay their workers minimum prevailing wage rates and to comply with other apprenticeship and recordkeeping obligations. Contractors and subcontractors are liable for violations of prevailing wage laws.

AB 1939 adds section 1784 to the California Labor Code to allow contractors to bring an action against the hiring party where the Department of Industrial Relations, the Labor and Workforce Development Agency or a court determines that the work covered by the project is a public work. In such an action, prevailing contractors may recover an award for increased costs, such as the difference between the wages actually paid to an employee and the prevailing wage for the project, penalties, and legal fees.

AB 2074—Liquidated Damages for Minimum Wage

An employee who receives less than the applicable state minimum wage is entitled to bring an action to recover the unpaid wages. Typically, the employee can bring the claim any time within three years of when the wages were earned. The employee may be able to expand the time frame to four years if the employee can establish the failure to pay minimum wage is also an unfair business practice under Business & Professions Code section 17200, et seq. An employee can also bring a claim for liquidated damages "in an amount equal to the wages unlawfully unpaid and interest thereon."

AB 2074, also called "Recovery of Wages: Liquidated Damages," brings parity between the statute of limitations for minimum wage claims and the statute of limitations for liquidated damages on those claims. According to the bill, an employee may recover liquidated damages in an amount equal to the wages unlawfully unpaid.

SB 1360—Counting Recovery Periods as Hours Worked

SB 1360 confirms that recovery periods that are taken pursuant to heat illness regulations are paid breaks and count as hours worked. SB 1360 reiterates existing law in this area and was passed to clear up any confusion. SB 435 provides that an employee is entitled to a recovery period when he is working outdoors in temperatures exceeding 85° Fahrenheit. Employers must provide and encourage employees to take a cool down rest period of no less than five minutes when employees feel the need to do so for protection from overheating.

The California Division of Occupational Safety and Health (Cal/OSHA) can issue a citation for a heat illness violation if an employer fails to pay employees for recovery periods. Also, because there is no legal cap on how many recovery periods workers can take in a day, employers will have to carefully review their heat illness policies to put a cap on how many recovery periods are reasonable under the provision.

Contract Workers

SB 477—Foreign Labor Contractors

Beginning July 1, 2016, SB 477 requires foreign labor contractors to be registered with California's Labor Commissioner. The contractors must fully disclose employment terms and conditions in writing, in a language they understand, and are prohibited from charging workers recruitment fees. The bill bans intimidation, coercion, termination or discrimination against a foreign worker or a member of the worker's family in retaliation for a foreign worker's exercise of any rights under this measure. The bill would prohibit a person from knowingly entering into an agreement for the services of a foreign labor contractor that is not registered with the commissioner.

A contractor may not knowingly provide a worker with false or misleading information. The bill prohibits foreign labor contractors from soliciting a foreign worker for a job in California in the absence of a bona fide offer of employment. California-based employers would be required to use the services of only registered foreign labor contractors. Foreign labor contractors and employers would be subject to penalties for violations, usually a misdemeanor. Aggrieved workers would have civil causes of action to protect their interests and could bring an action for injunctive relief or damages, or both, and authorizes recovery of damages, costs, and reasonable attorney's fees, in an amount not less than $500.

There are documentation and registration requirements and a person who violates any provision of this law shall be subject to a civil penalty of no less than one thousand dollars ($1,000) and no more than twenty-five thousand dollars ($25,000) per violation. Please contact us if you are working with foreign labor contractors.

AB No. 1897—Liability for Companies Using Workers from Staffing Agencies and Other Labor Contractors

AB 1897 extends liability for wage, Cal/OSHA, and workers' compensation violations to companies using contracted labor from staffing agencies and other labor contractors. The bill aims to address the increasing use of long-term temporary workers in place of regular employees by creating joint liability for the labor contractor and the company using temporary labor.

This bill applies to all but a very limited number of companies with 25 or more employees (i.e., the "client employer") that obtain or are provided workers to perform work within their "usual course of business" from companies that provide workers (i.e., "labor contractors"). The definition of "client employer" excludes businesses with a workforce of fewer than 25 workers (including both employees and temp hires) and those with 5 or fewer temp workers at any given time. The law also includes an anti-retaliation provision. The new law makes such companies liable for payment of wages to the contractor's employees, the contractor's failure to secure valid workers' compensation coverage and compliance with all occupational health and safety requirements.

AB 1897 would not prohibit employers from agreeing to any otherwise lawful remedies against labor contractors for indemnification from liability created by acts of the labor contractor. Employers cannot, however, shift to labor contractors any of their responsibilities under the California Occupational Safety and Health Act. Labor contractors will also have the same opportunity to contract with employers for indemnification. Furthermore, the bill will provide that any waiver of its provisions is contrary to public policy and unenforceable. This liability is imposed without consideration for whether the business had knowledge about the purported violations and irrespective of whether the client employer and labor contractor are joint employers. The statute expressly provides that it does not limit any other theories of liability or requirements established by other statutes or common law.

Employers should do the following to ensure compliance:

  • Review all existing contracts for labor or services to determine what contracts may fall within the scope of "usual course of business." For those contracts that qualify, contact those contractors to obtain assurances of their labor and employment compliance.
  • Consider including legal protections for wage-and-hour violations and workers' compensation coverage, including duty to defend and/or indemnification provisions, in new and existing contracts.
  • Limit reliance and use of contracted labor or services and determine internally where efficiencies can be made with regard to workload or hiring of additional employees.

Should you need assistance reviewing any of your labor service contracts, please call us.

Immigration

AB 263—Prohibition Against Unfair Immigration Related Practices

AB 263 makes it illegal for employers to target an employee's immigration status because the employee exercises a right protected under the California state labor code or a local ordinance applicable to employees like filing a wage claim, informing other employees of their rights, or inquiring as to whether an employer is complying with wage laws. AB 263 prohibits an employer from threatening to contact or contacting immigration authorities because an employee engages in protected activity.

AB 263 also contains a provision prohibiting employers from discharging or taking any other adverse action against an employee "because the employee updates or attempts to update his or her personal information, unless the changes are directly related to the skill set, qualifications, or knowledge required for the job." Although AB 263 is aimed at protecting workers who notify employers of changes to their work-authorization status, this particular language could also prevent employers from taking disciplinary action against those employees who update other types of information based on prior misrepresentations, such as criminal history.

The bill would provide that any person or entity that violates these provisions is guilty of a misdemeanor, and would further subject an entity that violates these provisions that is a corporation or limited liability company to a civil penalty not exceeding $10,000 for each violation of these provisions. It's best to comply with all immigration laws at the time of hire including completion of the Employment Eligibility Verification Form (I-9).

Workers' Compensation

AB 1746—Priority Conference Calendars

AB 1746 would require that worker's compensation cases in which the employee is or was employed by an illegally uninsured employer and the disputed issues are employment- or injury-related be placed on the priority conference calendar established under existing law.

AB 2732—Workers' Compensation Clean Up

This legislation allows a request for an Independent Medical Review, after a treatment recommendation has been denied, modified, or delayed , to be on a form of up to two pages, instead of the current one page. AB 2732 also permits the Workers' Compensation Appeals Board (WCAB) to allow medical-legal expenses to be pursued through liens, and provides that the employer must pay the lien filing fee or lien activation fee in specified circumstances. The bill also provides that prohibition on lien assignments does not apply to assignments that were completed prior to January 1, 2013 or was required by contract that became irrevocable and enforceable prior to January 1, 2013.

Public Works: Apprenticeship Program

AB 2744—Public Works: Apprenticeship Program

Existing law provides that when a contractor performing a public works project is found by the Labor Commissioner to be in violation of the requirements relating to public works contracts, except with regard to the employment of apprentices, with intent to defraud, or within a three-year period of having committed two or more separate willful violations of these provisions, the contractor is ineligible to bid on, be awarded, or perform work as a subcontractor on a public works contract for specified periods of time. AB 2744 expands these provisions to the employment of apprentices.

If the Labor Commissioner finds the contractor or subcontractor knowingly committed a serious violation of any provision of existing law related to apprentices, the Labor Commissioner may also deny to the contractor or subcontractor and its responsible officers, the right to bid on or to be awarded or perform work as a subcontractor on any public works contract for a period of up to one year for the first violation and for a period of up to three years for a second or subsequent violation.

Unemployment Insurance Benefits

SB 1314—Unemployment Insurance Benefits: Determination

SB 1314 would extend the deadline for claimants and employers to appeal unemployment benefits eligibility, as specified, to an administrative law judge (ALJ) and to the California Unemployment Insurance Appeals Board (CUIAB) from 20 to 30 days, on and after July 1, 2015

This amendment adds 10 days to the deadline to request a hearing, as well as an additional 10 days to file an appeal following an administrative law judge's ruling. This law allows companies time to investigate facts supporting possible disqualification, seek legal counsel, and evaluate the pros and cons of filing an appeal.

Child Labor Protection Act of 2014

AB 2288—Employing Minors

The Child Labor Protection Act of 2014 would allow treble damages to an individual who was discriminated against in the terms or conditions of his or her employment because he or she filed a claim or civil action alleging a violation of employment laws that arose while the individual was a minor. A person may file a civil action claim that is the result of what they see as a violation of California Labor Code. The claim must be filed while the person is still a minor, or by the end of the statute of limitations, which may run beyond the period when the person filing the claim ceases to be a minor.

Violation awards for an act involving a minor who is 12 years of age or younger is increased to between $25,000.00 and $50,000.00 for each violation by an employer.

Health Care

SB 1034—90-Day Waiting Period for Health Care Coverage

California previously had a 60-day waiting period for granting employees health care coverage, but SB 1034 extends that to a 90-day waiting period in compliance with the Patient Protection and Affordable Care Act (ACA).

Joseph J. (J.J.) Minioza is a partner in Ericksen Arbuthnot's Oakland office and can be reached at 510.832.7770 or . Albert (Terry) Finch is a partner in the firm's San Francisco office and can be reached at 415.362.7126 or . Mr. Minioza and Mr. Finch are Co-Chairs of the firm's Employment Law Practice Group.