2018 Employment Laws and Regulations

By Sharon Page

California Governor Jerry Brown kicked off 2018 by signing several bills that have a direct impact on employers and employment throughout the state. Two major bills restricting hiring informa­tion both went into effect on January 1, 2018. Both restrict an employer’s abil­ity to inquire into an applicant’s back­ground. The first restricts an employer from asking about and/or using criminal history information and the other re­stricts salary history. Minimum Wage, Immigration Enforcement and the Pa­rental Leave Act round out the major legislation.

Criminal History Restriction AB 1008 was proposed and passed by the Califor­nia Legislature in response to the statis­tic that nearly one in three adults have an arrest or conviction record leading to under- and unemployment for millions. Language in the bill states, “Experts have found that employment is essential to helping formerly incarcerated people support themselves and their families, that a job develops prosocial behavior, strengthens community ties, enhances self-esteem, and improves mental health, all of which reduce recidivism. These ef­fects are strengthened the longer the per­son holds the job, and especially when it pays more than minimum wage.” The restriction on using criminal background history is designed to reduce barriers to employment for those with prior convic­tions. In addition to the statewide ban, several municipalities have developed their own restrictions, and employers are cautioned to seek additional information if they have employees who are working in those areas which include the cities of Los Angeles and San Francisco.

As of January 1, 2018, employers with 5 or more employees may not seek crimi­nal history inquiries prior to making a conditional offer of employment. This includes seeking information on an ap­plication, during the interview process or conducting a criminal background check prior to extending a conditional offer of employment. The only excep­tion is when the position is required by any state, federal or local law to conduct a criminal background check.

Employers who desire to do a back­ground check should now take these steps:

  • Review application and verify it does NOT ask about criminal history
  • Make sure interview questions don’t ask about criminal history
  • Extend conditional offer of employ­ment, if using a background check
  • Perform or authorize background check.

If it comes back “clear,” proceed with hiring

  • If the background check comes back with a “Flag,” follow these steps, out­lined in the regulations:

Company completes Individualized Assessment Worksheet

Company issues Preliminary Written Decision (if assessment excludes applicant from qualification)

Applicant has opportunity to respond

Company issues written notice of Fi­nal Decision.

Salary History Restriction is an expan­sion of the Fair Pay Act and equal pay protection in California. The rationale behind this law is that determining an applicant’s current salary based on prior salary may perpetuate discriminatory pay practices. California’s law (and the other states that have passed similar laws) are intended to narrow the pay gap between men and women and among racial and ethnic minorities by emphasizing the pay being for a specific position and not based on prior salary. This law applies to all employers, regardless of size. An employer shall not rely on salary history information of an applicant for employ­ ment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant. Em­ployers may not seek salary history in­formation, including compensation and benefit information, about an applicant for employment. Employers are also restricted from using an agent to gather that information, so employers need to ensure they are not getting salary his­tory from background check vendors as well. Many smaller employers have his­torically used applicant information to do an informal analysis of the going rate for the positions and what competitors may be paying for similar positions, and this restriction will prevent them from doing that. In addition, employers, upon reasonable request, need to provide the pay scale for a position to an applicant applying for employment. This means that employers may need to create pay scales for the different positions within their business if they don’t already have them.

The only exception to this regulation is that it does not apply to salary history information disclosable to the public pursuant to federal or state law, includ­ing the California Public Records Act or the federal Freedom of Information Act. In addition, if an applicant voluntarily and without prompting discloses salary history information to a prospective em­ployer, nothing in the regulations pro­hibits that employer from considering or relying on that voluntarily disclosed sal­ary history information in determining the salary for that applicant. Employers should take the following steps:

  1. Ensure the application does not have a space for prior salary (typically found in the sections asking about current or past employment)
  2. Ensure anyone involved in the hiring process understands that employers can not ask about past salary
  3. Create or review pay scales for the different positions within the company

Minimum Wage Requirements While not a new law, minimum wages increased again this year during the phase-in of the minimum wage steps to reach $15/hour by 2022-2023. When minimum wages for hourly employees increase, employers must also ensure exempt employees’ salaries are at least two times the state minimum wage. Currently, employers with 26 or more employees must pay a minimum of $11/hour and exempt employees must be earning at least $45,760/annum. Em­ployers with 25 or fewer employees must be paid a minimum of $10.50/hour and exempt employees must be earning at least $43,680/annum.

Steps for employers to take:

  1. Ensure all hourly employees are be­ing paid at least minimum wage for all hours worked (and appropriate over­time)
  2. Ensure all exempt employees are being paid at least two times the state minimum wage

In a lose-lose proposition for employ­ers, the state has declared specific rules on Immigration Enforcement and im­poses restrictions on federal immigra­tion agency access. The state has now set up employers to possibly risk fines and penalties from the state for violating their law and fines and penalties from the feds for not complying with their agency instructions. To comply with state law, California employers should only allow access to a non-public worksite with a judicial warrant. In addition, employ­ers are to post a Notice of Inspection in the language employees predominately use. The Labor Commissioner is devel­oping a notice template and will have it published by July 1, 2018. Currently, the federal Department of Justice has filed suit against the state. Best practice for California employers would be to contact their employment law attorney immediately upon being visited by Im­migration and Customs Enforcement to ensure they get proper guidance on how to limit their liability in these murky wa­ters.

Lastly, with a major impact on employers with 20-49 employees, and a lesser im­pact on larger employers, the new Paren­tal Leave Law provides job-protected leave for 12 weeks of baby bonding leave within one year of birth/adoption or fos­ter care placement. This leave is in addi­tion to an employee’s eligibility for Preg­nancy Disability Leave. The law does not apply to employees subject to the federal Family Medical Leave Act (FMLA) or the California Family Rights Act (CFRA) but extends the job protection to addition­al employees.

Employees are eligible for Parental Leave if the employee worked:

  • For a covered employer for at least 12 months;
  • At least 1,250 hours in the past 12 months; and
  • At a worksite with at least 20 em­ployees within a 75-mile radius.

Employers should review their work­sites to see if their employees may be entitled to Parental Leave and, if they are, set up a system for notifying em­ployees, tracking the leave, and ensur­ing compliance with the new law.

Employers in California are suffering from rule and regulation fatigue, and this year the legislature continued in its path of adding to the burdens of the business community. Businesses need to make sure they keep their eyes on Sacramento and closely follow all new and updated regulations to be compliant.

Sharon Page,The HR Edge, Human Re­sources, Consulting, Training. The HR Edge specializes in partnering with our clients to ensure compliance with state and federal rules and regulations; assisting with hiring and firing; providing training and coaching; and helping businesses manage their risks.