VB CLIENT ADVISORY - New 2012 Employment Laws
New 2012 Employment Laws
Varner & Brandt Law Update
As another year draws to an end, California employers must again prepare themselves for the wave of new employment laws that are set to take effect in 2012. Although the anticipation of the California Supreme Court’s ruling in Brinker Restaurant Corp. v. Superior Court, has captured many employer’s attention—which ruling is expected sometime in early 2012—the maze of new employment obligations and restrictions should not be forgotten. Below are brief summaries of some of the new employment legislation in California that will impact employers.
Misclassification of Independent Contractors (SB 459)
As the level of civil suits and state and federal scrutiny involving misclassification of employees as independent contractors steadily increase, state legislatures have made it a priority to stop further abuse. SB 459 has taken significant steps to punish and deter unscrupulous employers by permitting the Labor and Workforce Development Agency to impose civil penalties ranging from $5,000 to $15,000 ($10,000 to $25,000 for repeat offenders) per incident for employers that engage in “willful misclassification” of an employee as an independent contractor. If an employer is a licensed contractor and it violates the law, the Labor and Workforce Development Agency, or court is required to provide a certified copy of the order to the Contractor’s State License Board for disciplinary action against the licensee. There is also joint and several liability imposed on any person who, for money or anything else of value, knowingly advises an employer to treat an employee as an independent contractor. Employees who provide advice to their employers and attorneys providing counsel and advise are excluded from liability under the new law.
Wage Theft Protection Act (AB 469)
AB 469 requires employers provide each new non-exempt employee with written notice of specific payment information at the time of hire and any time the employee’s pay changes. The notice must contain the employer’s contact information, employer’s workers’ compensation carrier’s contact information, employer’s regular paydays, the rate of pay and the basis (whether hourly, salary, piece commission or otherwise, including any overtime rate) the employee’s pay rate, and any allowances included as part of the minimum wage calculation, such as meals or lodging. Any change in information requires a written notice to the employee within seven days. A template of the notice will be made available by the Labor Commissioner.
Pregnancy Disability and Leave Related Protections (SB 299 and AB 592)
Employers with five or more employees are now required to continue to provide group health plan coverage during the entire time that an eligible employee is on pregnancy disability leave under California’s Pregnancy Disability Act (“PDA”). Coverage must be at the same level and conditions as would have been provided had the employee not gone on leave. The employer is, however, able to recover from the employee the health care premiums the employer paid if the employee fails to return from leave, provided the failure to return is not due to the employee taking leave under the California Family Rights Act (“CFRA”) (which affords family care and medical leave), or due to circumstances beyond the employee’s control.
Under AB 592, it is unlawful for employers to “interfere with, restrain, or deny an employee’s exercise of, or the attempt to exercise, any rights” provided under the PDA or the CFRA, or retaliate against an employee for taking advantage of such right. The true intent of AB 592 is essentially to clarify the employer’s restrictions under the PDA and the CFRA, which, in its current form, does not explicitly prohibit employers from interfering with an employee’s right to take a leave of absence or otherwise exercise rights under either law.
Discrimination Based on Gender Identity (AB 887)
The adoption of AB 887 will amend the Fair Employment and Housing Act to redefine the definition of “gender” to include both “gender identity” and “gender expression” and clarify that discrimination on either basis is prohibited. Current law only references gender identity. The term “gender expression” is defined as “a person’s gender-related appearance and behavior, whether or not stereotypically associated with the person’s assigned sex at birth.” AB 887 also requires employers to allow employees to dress or appear consistent with that employee’s gender identity and gender expression (although employers are not prohibited from imposing reasonable workplace appearance, grooming or dress standards).
Commission Agreements (AB 1396)
Although not effective until January 1, 2013, all employers who pay employees with commissions will be required to provide a written contract describing the commission payments. The written contract must set forth the method by which the commissions will be computed and paid, and will remain in effect until superseded or terminated in writing. Employers also must obtain a signed receipt from the employee acknowledging receipt of the written agreement.
All employers are strongly encouraged to review their current practices and policies to ensure continued compliance with new employment laws, as well as all existing laws. If you have any questions concerning the new laws, or require assistance in reviewing your current policies and practices, please contact Varner & Brandt LLP.