2016 Brings Major Changes to California Employment Laws

There are a myriad of new California employment laws on the books as of January 1, 2016. This is a friendly reminder to check and update your handbooks, posters, contracts, and handouts so you remain in compliance with state law.

1. Labor Commissioner’s Authority to Enforce Judgments for Wage Theft Expands With Enactment of the New California Fair Day’s Pay Act (SB 588)

California’s Senate Bill (“SB”) 588, known as the California Fair Day’s Pay Act, adds teeth to the California Labor Commissioner’s ability to enforce judgments for wage theft.

a. The Commissioner can now use any of the existing remedies available to a judgment creditor, and act as a levying officer when enforcing a judgment. If the Commissioner imposes a judgment, penalty or fine against an employer — and that employer does not pay, the Commissioner can now place a lien on the employer’s property or levy on the business’ bank accounts and/or accounts receivable. The Commissioner can include the employee’s attorneys’ fees in the lien or levy.

b. An employer may not evade debts to workers by closing down its business and re-opening under a new name. A new business that is “similar in operation and ownership” to the judgment-employer is also liable for the wages owed. A new business will be considered the “same employer” for liability if (1) the employees of the successor employer are engaged in “substantially the same work in substantially the same working conditions under substantially the same supervisors,” or (2) the new entity has “substantially the same production process or operations, produces substantially the same products or offers substantially the same services, and has substantially the same body of customers.”

c. Aggrieved employees can now bring wage theft claims against the individual owners of the employing entity as well as anyone else who acts “on behalf of” the employer.” This creates individual liability in California for wage and hour violations, and liable individuals can suffer a lien or levy, just like the business.

d. If an employer is found to have engaged in wage theft, the Commissioner can now require the employer to post bond to continue to do business in California, or suffer revocation of their California business license.

e. There is now a penalty for wage theft violations. In addition to the wages due, the employer may now be liable for a penalty of $2,500 for the first violation and $100 per day the employer is in business in violation of the law (capped at $100,000).

2. The Healthy Workplaces, Healthy Families Act of 2014 (California Paid Sick Leave) is Clarified (AB 304)

As originally written, the Healthy Workplaces, Healthy Families Act (“Paid Sick Leave Act” or “Act”) raised as many questions as it provided answers. In AB 304, the California Legislature attempts to clarify the employer obligations and deal with unanticipated questions and consequence.

a. An employee who works in California for 30 or more days within a year from his hire date is entitled to paid sick days for prescribed purposes, to be accrued at a rate of no less than one hour for every 30 hours worked. The Paid Sick Leave Act now requires the employee do that work for the same employer (as opposed to successive and different employers) in order to qualify for accrued sick leave.

b. Previously, an employer could delay use of accrued paid sick days until the 90th day of employment, and limit the time granted to 24 hours or 3 days in each year of employment. Under the new law, the employer can specify that use of paid sick days is limited to 24 hours or 3 days in each year of employment, or one calendar year, or one 12-month period.

c. Employers must give written notice (on or with the itemized wage statement) of the amount of paid sick leave or PTO available to the employee. Recognizing that many California employers provide “unlimited” PTO, the law now allows an employer to give the required notice of a Paid Sick Leave balance by indicating “unlimited” on the employee’s itemized wage statement.

d. The Paid Sick Leave Act now provides that a rehired employee is not entitled to reinstatement of his or her accrued PTO if they are rehired within a year of separation, and if PTO was paid out at the time of separation.

e. The Paid Sick Leave Act is clarified to explain that an employer need not add time under the Act if, in fact, the employer is already providing sick leave or PTO that meets or exceeds the standards of use and accrual.

f. Previously, the Act required employers to maintain records of how sick leave accrued and was used, even if the employer had a fully-compliant PTO policy covering both vacation and sick leave accruals. It meant that the employee had to report when he was using his PTO for vacation and when he was using it for sick leave. Now, the law acknowledges that an employer has no obligation to inquire into or record the purposes for which an employee uses sick leave or paid time off.

3. New Restrictions Added to the E-Verify Process (AB 866, 622)

AB 866 amends California’s e-verify laws to prohibit the state or any governmental entity from requiring an employer to use e-verify to check the employment authorization of an employee or applicant for employment, unless the process is required by federal law as a condition of entering into a federal contract. AB 866 also makes it an unlawful employment practice for an employer to use the e-verify process to check employment authorization at a time or in a manner not specifically authorized by state or federal statute. Finally, AB 866 requires the employer to provide notice to an affected employee issued by the Social Security Administration or the United States Department of Homeland Security containing information specific to the employee’s E-Verify case or any tentative non-confirmation notice. There is a $10,000 penalty for each violation.

4. Labor Commissioner Can Now Enforce Employer Violations of Local Minimum Wage Laws (SB 970)

Senate Bill 970 gives the California Labor Commissioner authorization to investigate and enforce local overtime and minimum-wage laws and ordinances, and to issue citations and penalties for violations unless the local entity has already cited the employer for the same violation. Additionally, the Labor Commissioner may now issue citations and penalties to employers that violate the expense reimbursement provisions of section 2802.

5. New PAGA Cure Period (AB 1506)

The California Private Attorney General Act (“PAGA”) has been amended to provide a cure period for certain technical violations relating to the employer wage statement. Under the new law, when an employee notifies the employer and the Labor Workforce Development Agency that wage statements do not include the inclusive pay dates or the name and address of the legal entity that is the employer, the employer may “cure” the alleged violation within 33 calendar days of the postmarked date of the notice. To “cure” a violation, the employer must provide a compliant, itemized wage statement to each aggrieved employee for each pay period for the three-year period prior to the date of the written notice. Written notice of the “cure” must be delivered by certified mail within the 33 day period. No civil suit for these two violations can be brought under PAGA if the employer properly cures the defect in the wage statement. The cure can be applied once in any 12-month period for the same violations, regardless of the location of the worksite.

6. Unruh Civil Rights Act Revised: New Protected Classes (SB 600)

The Unruh Civil Rights Act, California Civil Code sections 51-52, was enacted to prevent discrimination in public accommodations and contracts. For instance, it violates Unruh to refuse to rent a hotel room to someone based on color or religion, or to deny contracts based on national origin. As of January 1, 2016, however, Unruh was amended to include prohibitions against discrimination by business owners because of a customer’s or vendor’s citizenship, primary language, or immigration status.

While this is not specifically aimed at conduct occurring within the employer/employee relationship, an employer who is a business owner under Unruh can be held liable for conduct of its employees in dealing with the public; i.e., refusing to serve a traveler because he speaks little English, or because her photo ID is a passport from a foreign country.

7. School Activity / Sick Time Leaves of Absence Explained and Expanded (SB 579)

a. Employees may now take “School Activity Leave” to address a child care provider emergency, a school emergency, finding, enrolling, and reenrolling a child in school, or with a child care provider. Moreover, the employee can be step-parents, foster parents, or individuals who stand in loco parentis to a child.

b. Employers may permit an employee to use paid sick leave to cover any leave provided for by the Healthy Workplaces, Healthy Families Act of 2014.

8. Gender Based “Fair Pay Act” Provisions Amend Labor Code Section 1197.5 (SB 358)

Senate Bill 358 amends Section 1197.5 of the California Labor Code to prohibit employers from paying an employee at wage rate less than the rates paid to employees of the opposite sex for “substantially similar work.” “Substantially similar work” is determined by analyzing the skill, effort, and responsibility required to perform the position under similar working conditions. The work does not have to be in the same establishment or facility of the employer, and in fact, the analysis can be made across different employer owned establishments or facilities.

Burden of proof:

Amendments to Section 1197.5 require that the employer carry the burden of proof to demonstrate:

a. The dissimilarity of work or working conditions.

b. The wage differential is based on a seniority system, merit system, quality of production by the employee, or other bona fide factor.

c. The absence of a discretionary reason for the wage differential.


SB 358 prohibits an employer from discharging or otherwise discriminating or retaliating against an employee for invoking his or her rights under the new legislation.

Record Retention:

SB 358 requires an employer to maintain records of wages, wage rates, job classifications, and other terms and conditions of employment for a period of three years (previously two years).

9. New Anti-Retaliation Provisions for Whistleblowers (AB 1509)

When members of the same family are employed by the same employer, Assembly Bill 1509 prohibits employers from retaliating against the family member an employee who has or is perceived to have engaged in conduct protected by whistleblower statutes.

10. Continued Use of Meal Period Waivers for Healthcare Employees (SB 327)

Senate Bill 327 formally clarifies that special meal waiver rules for employees in the healthcare industry remain in force despite the uncertainty caused by a recent Court of Appeals opinion, Gerard v. Orange Coast Memorial Medical Center, G048039, in the Court of Appeal of the State of California, Fourth Appellate District.

If you would like to discuss these issues further, or have any questions about this blog, please contact us.