October 18, 2012
This update summarizes California bills recently signed into law by Governor Edmund G. Brown, Jr.
AB 1964 Clarifies that Religious Dress and Grooming Practices are Protected Under FEHA and that the Undue Hardship Standard Applied to Assess Religious Accommodation Requirements under the FEHA is More Stringent than the Standard Applied Under Title VII
On September 8, 2012, Governor Brown signed AB 1964, the Workplace Religious Freedom Act, which amends Government Code Section 12926(p) and Government Code Section 12940(l). The bill clarifies that “religious dress” and “religious grooming practices” are aspects of “religious belief, observance and practice” which are protected under the California’s Fair Employment and Housing Act (FEHA). Both terms are to be construed broadly. “Religious dress” includes “the wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts and any other item that is part of the observance by an individual of his or her religious creed.” “Religious grooming” includes “all forms of head, facial and body hair that are part of the observance by an individual of his or her religious creed.”
Notably, the bill also clarifies that the definition of “undue hardship” under the FEHA is to be applied when considering a request for a religious accommodation, and that this is the same standard applied when assessing disability accommodation requests. The legislative history makes clear that "undue hardship" under the FEHA is a more stringent standard than the "de minimis cost" standard applied under Title VII.
The bill also specifies that an accommodation of an individual’s religious dress or religious grooming practice is not reasonable if the accommodation requires segregation of the individual from other employees or the public.
AB 1775 Increases the Wage Garnishment “Floor”
On September 23, 2012, Governor Brown signed AB 1775 which amends Sections 706.011 and 706.050 of the Code of Civil Procedure regarding wage garnishment to increase the minimum amount of a judgment debtor’s weekly earnings that are exempt from wage garnishment.
The bill amends Section 706.011 by defining “disposable earnings” as “the portion of an individual’s earnings that remains after deducting all amounts required to be withheld by law.” The bill amends Section 706.050 by stating that the maximum amount of disposable earnings subject to garnishment is “the lesser of the following:
Twenty-five percent of the individual’s disposable earnings for that week
The amount by which the individual’s disposable earnings for that week exceed 40 times the state minimum hourly wage in effect at the time the earnings are payable.”
The bill also provides for different minimum wage multipliers in case an individual is paid on other than a weekly basis (i.e. daily, biweekly, semimonthly, or monthly).
The bill will become operative on July 1, 2013.
AB 1844 Restricts Employers’ Use of Employees’ Social Media
On September 27, 2012, Governor Brown signed AB 1844 which adds Section 980 to the Labor Code. Section 980 prohibits employers from requiring or requesting an employee or applicant to:
Disclose a personal social media username or password;
Access personal social media in the employer’s presence; or
Divulge any personal social media.
However, the law does not “affect an employer’s existing rights and obligations to request an employee to divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes
of that investigation or a related proceeding.”
“Social media” is defined as “an electronic service or account, or electronic content, including, but not limited to, videos, still photographs, blogs, video blogs, podcasts, instant and text messages, email, online services or accounts, or Internet Web site profiles or locations.”
Employers can still require or request an employee’s username or password for accessing “an employer-issued electronic device.”
The law also provides that an employer may not discharge, discipline, threaten to discharge or discipline, or otherwise retaliate against an employee or applicant for not complying with a request or demand by the employer that violates Section 980.
AB 2386 “Sex” under FEHA Includes Breastfeeding
On September 28, 2012, Governor Brown signed AB 2386, amending Government Code Section 12926 by clarifying that the definition of the term “sex” under the Fair Employment and Housing Act includes “breastfeeding or medical conditions related to breastfeeding.”
AB 1598 Modifies the Definition of “Installation” Regarding Public Works
On September 30, 2012, Governor Brown signed AB 1598, amending Labor Code Section 1720 by providing that the term “installation” as it refers to public works “includes, but is not limited to, the assembly and disassembly of freestanding and affixed modular office systems.”
AB 1744 Applies New Requirements for Temporary Services Employers Regarding New Hire Notice and Itemized Wage Statements
On September 30, 2012, Governor Brown signed AB 1744, amending Labor Code Section 226 and adding Section 226.1 to the Labor Code. The bill amends Section 226 by requiring temporary services employers to include on the employee’s itemized wage statement the rate of pay and the total hours worked for each temporary services assignment. This new requirement goes into effect beginning July 1, 2013.
In addition, AB 1744 amends Labor Code Section 2810.5 by requiring temporary services employers to include on the required new hire written notice the following information regarding the legal entity for whom the employee will perform work:
Physical address of the main office
Mailing address, if different from the physical address of the main office
Any other information deemed material and necessary by the Labor Commissioner
New Labor Code Section 226.1 provides that the requirements applicable to temporary services employers under Section 226 to report rate of pay and total hours worked for each assignment do not apply to security services companies licensed by the Department of Consumer Affairs that solely provide security services. Likewise, amended Section 2810.5 specifies that the new hire notice requirements pertaining to temporary services employers do not apply to a security services company that is licensed by the Department of Consumer Affairs and that solely provides security services.
AB 2103 Private Agreements Cannot Include Overtime Hours in a Nonexempt Employee’s Fixed Salary
On September 30, 2012, Governor Brown signed AB 2103 amending Labor Code Section 515 and overturning the decision in Arechiga v. Dolores Press (2011) 192 Cal. App. 4th 567 regarding overtime and payment of a fixed salary to nonexempt employees. The bill states that “payment of a fixed salary to a nonexempt employee shall be deemed
to provide compensation only for the employee’s regular, nonovertime hours, notwithstanding any private agreement to the contrary.”
AB 2674 Substantially Modifies Labor Code Section 1198.5 Regarding Employee Rights to Inspect and Copy Personnel Files
On September 30, 2012, Governor Brown signed AB 2674 amending Labor Code Section 226 and Labor Code Section 1198.5. Section 226(a) requires employers to maintain copies of worker wage statements and records of deductions for at least three years. AB 2674 clarifies that the term “copy” includes “a duplicate of the itemized statement provided to an employee or a computer-generated record that accurately shows all of the information required by this subdivision.”
Under Section 1198.5, an employee has the right to inspect the personnel records that his or her employer maintains relating to the employee’s performance or to any grievance concerning the employee. AB 2674 provides that employees also have a right to receive a copy of such personnel records. In addition, AB 2674 requires an employer to maintain personnel records for not less than three years after termination of employment.
AB 2674 requires employers to provide a current or former employee, or his or her representative, an opportunity to inspect and receive a copy of the employee’s personnel records within 30 calendar days after the date the employer receives a written request, unless the current or former employee, or his or her representative, and the employer agree in writing to up to a 5-day extension. However, the right to inspect or copy records ceases during the pendency of a lawsuit filed by the employee or former employee against the employer relating to a personnel matter.
AB 2674 allows current or former employees to submit their own written requests (including through a representative) to inspect or receive a copy of the personnel records, or to submit a written request by completing an employer-provided form. An employer- provided form must be made available upon a verbal request to the employee’s supervisor or to the individual designated by the employer to receive requests for the employer-provided form.
An employer is required to comply with only one request per year by a former employee to inspect or receive a copy of his or her personnel records. AB 2674 also provides that an employer is not required to comply with more than 50 requests to inspect and receive a copy of personnel records filed by a representative or representatives of employees in one calendar month.
AB 2674 provides that prior to making the personnel records available for inspection or providing a copy of those records, the employer may redact the name of any nonsupervisory employee contained therein.
AB 2674 provides that Labor Code Section 1198.5 shall not apply with respect to an employee covered by a valid collective bargaining agreement if the agreement provides, among other things, for a procedure for inspection and copying of personnel records.
In the event an employer violates the law, AB 2674 permits a current or former employee or the Labor Commissioner to recover a penalty of $750 from the employer, and would further permit a current or former employee to obtain injunctive relief, as well as costs and attorney’s fees. AB 2674 also provides that a violation of Section 1198.5 constitutes
an infraction. Impossibility of performance, not caused by or resulting from a violation of law, may be asserted as an affirmative defense by an employer in any action alleging a violation of Section 1198.5.
AB 2675 Provides for an Exemption for Temporary, Variable Incentive Payments from the Requirements for Written Commission Contracts
AB 2675, which was signed by Governor Brown on September 30, 2012, clarifies that the law requiring written commission contracts (Labor Code Section 2751) does not apply to “temporary, variable incentive payments that increase, but do not decrease, payment under a written contract.”
After the enactment of Section 2751 last year, the California New Car Dealers Association expressed concern regarding certain temporary incentives offered to employees of car dealers. They argued that it would be burdensome for them to have to issue a new written commission plan each and every time such a special incentive is offered. The amendments made by AB 2675 clarify that such temporary and variable incentive payments, which increase (but do not decrease) commission payments, are not considered "commissions" for the limited purpose of the writing requirement of Labor Code Section 2751. Therefore, an employer will not have to issue a new written commission contract every time such a short-term incentive is offered.
AB 2677 Clarifies that Certain Employer Payments Do Not Operate To Constitute a Violation of Prevailing Wage Law
California law requires that, except as specified, not less than the general prevailing rate of per diem wages may be paid to workers employed on public works projects. Labor Code Section 1773.1 deems per diem wages to include specified employer payments and provides that employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages. Section 1773.1, however, also provides that credits for employer payments do not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing. AB 2677 amends Section 1773.1 to provide that an increased employer payment contribution that results in a lower hourly straight time or
overtime wage shall not be considered a violation of the applicable prevailing wage determination so long as all of following conditions are met:
(1) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement;
(2) The basic hourly rate and increased employer payment are no less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the director’s general prevailing wage determination; and
(3) The employer payment contribution is irrevocable unless made in error.
AB 2677 also adds Section 1773.8 to the Labor Code, which provides that an increased employer payment contribution that results in a lower taxable wage shall not be considered a violation of the applicable prevailing wage determination so long as all of the following conditions are met:
(a) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement;
(b) The increased employer payment and hourly straight time and overtime wage combined are no less than the general prevailing rate of per diem wages; and
(c) The employer payment contribution is irrevocable unless made in error.
This bill was sponsored by the California State Association of Electrical Workers and the Western States Council of Sheet Metal Workers. They stated that many collective bargaining agreements allow members to elect to have a percentage or a set amount deducted from their paycheck and deposited in a supplemental pension account or a health care reserve at their discretion. The sponsors explained that the Department of Industrial Relations (DIR) has issued opinion letters finding that this practice does not constitute a violation of the prevailing wage as long as the total hourly package equals the correct prevailing wage rule. AB 2677 codifies the DIR opinion letters in order to avoid future misapplication of the statutes.
SB 1255 Clarifies When an Employee Is Deemed to Suffer an Injury Due To an Employer’s Failure to Comply with Itemized Wage Statement Requirements Under Labor Code Section 226
On September 30, 2012, Governor Brown signed SB 1255, which amends Labor Code Section 226 to provide that an employee is “deemed to suffer an injury” (which may result in the recovery of actual damages or penalties, costs and attorney’s fees) if the employer fails to provide a wage statement. In addition, AB 1255 provides that an employee is “deemed to suffer an injury” under Section 226 if the employer fails to provide complete and accurate information with respect to all nine items of information required to be included in the wage statement and the employee cannot promptly and easily determine from the wage statement alone one or more of the following:
The amount of the gross wages or net wages paid to the employee during the pay period or any of the following information: the total hours worked by the employee, the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis, all deductions, the dates of the period for which the employee is paid all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate.
Which deductions the employer made from gross wages to determine the net wages paid to the employee during the pay period.
The name and address of the employer and, if the employer is a farm labor contractor, the name and address of the legal entity that secured the services of the employer during the pay period.
The name of the employee and only the last four digits of his or her social security number or an employee identification number other than a social security number.
For purposes of this law, “promptly and easily determine” means a reasonable person would be able to readily ascertain the information without reference to other documents or information.
In order for an employer to be liable under Section 226, the employee must have suffered an injury “as a result of a knowing and intentional failure” by an employer to comply with the wage statement requirements listed in Section 226. AB 1255 clarifies that a “knowing and intentional failure” does not include an isolated and unintentional payroll error due to a clerical or inadvertent mistake. AB 1255 also provides that “[i]n reviewing for compliance with this section, the factfinder may consider as a relevant factor whether the employer, prior to an alleged violation, has adopted and is in compliance with a set of policies, procedures, and practices that fully comply with this section.
Please note that these summaries are not intended to constitute legal advice.
If you have questions regarding compliance with these new bills, or other employment laws, please feel free to contact either Kristin Pedersen or Maki Daijogo at Daijogo & Pedersen, LLP through our website, www.dpemploymentlaw.com, or by calling us at 415.924.9400.