NEW LAWS IMPACTING CALIFORNIA BUSINESSES IN 2019
A host of new legislation is set to become effective during the 2019 calendar year. This article attempts to provide a brief overview of some of the key new laws that could potentially impact business operations in California. Unless otherwise noted, the new laws are effective as of January 1, 2019.
Female Representation on Boards of Directors – Any publicly held corporation with its principal executive office in California is required to place at least one female director on its Board of Directors by December 31, 2019, or face steep financial penalties. Depending on the Board’s size, the number of required female members may be increased to up to three by the end of 2021.
Sexual Harassment Training Requirements – Existing law requires employers with 50 or more employees to provide at least two hours of prescribed training and education regarding sexual harassment, abusive conduct, and harassment based upon gender, as specified, to all supervisory employees every two years. SB 1343 requires employers who employ five or more employees to provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every two years thereafter, as specified. Temporary and seasonal employees are required to have training within the earlier of 30 days or 100 hours of work.
Confidentiality Clauses in Settlement Agreements – SB 820 provides that any confidentiality provision in a settlement agreement involving claims of sexual harassment, assault or discrimination does not prevent subsequent disclosure of factual information about the claim. Disclosure of the claimant’s identity however, is still prohibited.
Employer Defamation Protection Clarified Regarding Sexual Harassment – AB 2770 provides additional protections against defamation actions against employers and sexual harassment victims by providing that employees will not be liable for injury to the alleged harasser’s reputation if based on credible evidence and without malice. The legislation also provides that communications between the employee and the victim/witness are privileged. Also, an employer may reveal in a job reference whether an individual is not eligible for rehire because of a determination that he/she had engaged in sexual harassment.
Minimum Wage Increased – Existing law requires that the minimum wage is $10.50 for employers with 25 or fewer employees, and $11.00 for employers with 26 or more employees. With the goal of increasing the minimum wage to $15.00 by 2023 per mandatory annual increases, SB 3 (passed in 2016, but with annual changes through 2023) requires that on January 1, 2019 the minimum wage increase to (1) $11.00 per hour for any employer with 25 or fewer employees and (2) $12.00 per hour for any employer with 26 or more employees. Note that certain cities and counties have passed minimum wage legislation that in some circumstances require a higher minimum wage. Cities and counties with minimum wage legislation include, but are not limited to, Los Angeles (city and county), Malibu, San Diego and Santa Monica.
Unenforceable Releases of FEHA Claims or Rights – SB 1300 prohibits an employer, in exchange for a raise or bonus, or as a condition of continued employment, from requiring the execution of a release of a claim or right under FEHA or from requiring an employee to sign a nondisparagement agreement or other document that purports to deny the employee the right to disclose information about unlawful acts in the workplace. The bill also adds legislative intent that makes it harder for an employer to prevail in harassment claims (e.g., indicating such claims should rarely be resolved by summary judgment, and stating that a single act can be sufficient to support a hostile environment).
Lactation Accommodation Clarified – Existing law requires every employer to provide a private location for employees desiring to express milk. AB 1976 clarifies that the private location must be “other than a bathroom.”
Employment Applicant: Prohibition on Inquiry of Salary History is Clarified – Existing law prohibits an employer from seeking salary history information from an applicant, and relying on salary history information as a factor in determining whether to extend an offer of employment and what salary to offer. AB 2282 clarifies certain provisions of the law, namely, that the term “applicant” means external applicants (not existing employees), and it is permissible for an employer to ask an applicant about his or her salary expectation.
Employment Applicant: Prohibition on Inquiry of Conviction History is Clarified – For all employers with five or more employees, existing law prohibits: (1) the inclusion on any application for employment any question that seeks the disclosure of an applicant’s conviction history; (2) to inquire into or consider the conviction history of an applicant until that applicant has received a conditional offer; and (3) when conducting a conviction history background check, to consider, distribute or disseminate information related to specified prior arrests, diversions and convictions. SB 1412 clarifies that the prohibition does not prevent an employer from asking an applicant (or seeking from any source) information regarding “a particular conviction,” when (1) the employer is required by law to obtain information regarding the particular conviction of the applicant, (2) the applicant would be required to possess or use a firearm in the course of his or her employment, (3) an individual with that particular conviction is prohibited by law from holding the position sought by the applicant, or (4) the employer is prohibited by law from hiring an applicant who has that particular conviction.
Human Trafficking Training/Notices – Current law requires that certain types of businesses post notices containing hotline numbers and ways to seek help or report unlawful activity. SB 970 requires that by January, 2020, hotel and motel employees receive ongoing training to identify, respond to and report human trafficking, and AB 2034 contains similar requirements with respect to intercity passenger rails, light rails and bus station employees.
Paid Family Leave Expanded – Existing law provides for wage replacement benefits to workers who take time off work to care for a seriously ill family member or to bond with a minor child within one year of birth. SB 1123 expands the scope of the family temporary disability insurance program to include time off to participate in a qualifying exigency related to official military activities, or a call to covered active duty of the individual’s spouse, domestic partner, child, or parent in the armed forces of the United States. This change would not be effective until January 1, 2021.
Procedure for Disposition of Personal Property at Termination of Commercial Tenancy Adjusted – Existing law provides a procedure for the disposition of personal property remaining on the premises at the termination of a commercial tenancy, including that property may be kept, sold, or destroyed (after delivery of a prescribed initial written notice and without further notice) if the property is believed to be less than the “threshold amount,” which is the lesser of $750 or $1 per square foot of the premises occupied by the tenant. AB 2173 changes the “threshold amount” to the lesser of $2,500 or an amount equal to one month’s rent of the premises occupied by the tenant.
Gun Laws Expanded – The existing five year ban on gun ownership for those involuntarily admitted to a mental health facility more than once in a one year period was expanded by AB 1968 to be a lifetime ban. AB 3129 similarly extended the current ten year ban on those convicted of domestic violence or battery of a spouse or cohabitant to a lifetime ban. AB 18 also imposes a new excise tax on the sale of handguns and semi-automatic rifles to help fund the California Violence Intervention and Prevention Grant Program.
The foregoing article was prepared by Richard Rasmussen and Pablo De Leon. Anglin Flewelling Rasmussen Campbell & Trytten LLP (AFRCT) is a full-service law firm, providing legal counsel in most every area encountered by businesses operating in the western United States.