2019 Employment Law Update: Compliance in the New Year

Each January California employers have to ask themselves the question, what’s new in employment law?  2019 is no exception, as there have been a number of changes employers should be mindful of as we enter the New Year.   Here are some of the key changes affecting California employers this year:

Salary History: Finally, the question we’ve all been asking has been answered!  You can ask applicants about their salary expectations.  Questions about an applicant’s salary history remain unlawful.  Further clarification has also been provided by defining “pay scale” as a salary or hourly wage range, “reasonable request” is defined as a request made after an applicant has completed an initial interview and “applicant” has been clarified to exclude current employees.

Independent Contactors:  Determining independent contractor status can be challenging.  California has “simplified” the standard to the “ABC” test.  When determining independent contractor status, employers look at three factors:

  1. The worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of the work, and in fact; and
  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 for the hiring entity.

The “ABC” test effectively expands the definition of employee.   If your business uses independent contractors, this is a good time to re-examine their classification and ensure they are appropriately classified under the new standard.

Sexual Harassment:

The #metoo movement significantly influenced legislation this year with a series of new laws surrounding harassment.  Here are some of the key changes for employers:

Training: All employers with 5 or more employees are now required to provide sexual harassment training.  Additionally, training is now required for all employees, not just supervisors.  Regular employees will need one hour of training every two years, while supervisory employees will need two hours of training every two years.  New employees should receive training within six months of hire and all employees must have completed training by 2020.

Disclosure: It is now lawful for employers to disclose certain information relating to substantiated claims of sexual harassment and associated re-hire eligibility about current or former employees to a prospective employer.  Employers should review their reference policies to see if any updates are needed to allow for this type of release.

Settlement Agreements:  Settlement agreements can no longer include provisions that prevent the disclosure of factual information related to actions/causes of action about claims of sexual assault, sexual harassment or harassment or discrimination based on sex.

Additional things to consider:  Harassment laws are broadening and creating new challenges for employers.  The courts are discouraging settlement through summary judgment, which means that harassment claims will be time consuming and expensive to resolve.  As an employer, it’s important to stop harassment before it begins through training, policy and consistent practices.

Human Trafficking Training

Hotel and Motel employers (excludes B&Bs) need to provide at least 20 minutes of classroom or interactive human trafficking awareness training to employees who are likely to interact with human trafficking victims.  Training for employees employed prior to July 1, 2019 needs to be complete by January 1, 2020 and employees hired after July 1, 2019 must complete the training within 6 months of hire.  Training will need to be completed every two years thereafter.

Lactation Accommodation

The existing lactation accommodation law has been updated to specify that a location other than a bathroom must be provided for lactation purposes.  The location should be permanent, but temporary locations are acceptable under certain circumstances.

Women on Boards of Directors

All publically held companies whose principal executive offices are in California must have at least one female member of the board of directors by the end of 2019.  This minimum will increase according to the size of the board by 2021.

National Origin Discrimination

A mid-year change to national origin discrimination law took effect in July, 2018. For those that missed the update, the law prohibits “English only” language practices, unless there is a legitimate business necessity.  The law also specifies that employers should only require employees or applicants to present a valid driver’s license when required for the position.  Height and weight requirements are also unlawful unless essential to the position.

Immigration Update:

July, 2018 also brought changes to immigration law, when a Federal District Court challenged parts of California’s AB 450. The challenge brought 3 significant changes for California employers:

  1. Employers will not be found in violation of CA state law if they grant access to non-public worksite areas to an immigration enforcement agent who does not have a warrant.
  2. California employers may re-verify work eligibility of their employees even if not required to do so under Federal law.
  3. Employers will not be found in violation of CA law if they allow an enforcement agent to access employee records without a subpoena or warrant.

Employers are still required to provide notice to employees before and after ICE/DHS inspection of I-9 forms or other employment records.

Overtime for Agricultural Workers:

California agricultural employers with 26 or more employees need to adjust their overtime calculations this year. Overtime calculations will remain unchanged for agricultural employers with 25 or fewer employees.  Day of Rest overtime requirements remain applicable for agricultural employers of all sizes.  The chart below shows how overtime should be calculated based on the hours worked and employer size:

25 or Fewer Employees 26 or More Employees
Daily OT (1.5 X Regular Rate) > 10 hours > 9.5 hours
Weekly OT (1.5 X Regular Rate) > 60 hours > 55 hours
Day of Rest Entitlement

(1.5 X Regular Rate)

First 8 hours on 7th Consecutive Day of Work First 8 hours  on 7th Consecutive Day of Work
Day of Rest Entitlement

(2 X Regular Rate)

> 8 hours on 7th Consecutive day of work > 8 hours on 7th Consecutive day of work

Minimum Wage:

Minimum wage has increased again.  Effective January 1, 2019, the minimum wage has increased for both hourly and salary employees.  The chart below shows the new minimum wage for both, by employer size:

25 or Fewer Employees 26 or More Employees
Minimum Hourly Wage $11.00/hour $12.00/hour
Minimum Exempt Salary $45,760/year $49,920/year

 IRS Mileage Reimbursement Rate:

The IRS mileage reimbursement rate has increased to 58 cents per mile, a 3.5 cent per mile increase over last year.   The mileage reimbursement rate for miles driven in the service of a charitable organization remains unchanged at 14 cents per mile.