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2017 Employment Law Update: HR Essentials
You Need to KnowBrenda S. Kasper, Esq., SPHR-CA, SHRM-SCP
Impact of the Election
What Can Trump Do?
• Change obligations for federal contractors with the stroke of a pen
Unilaterally eliminate Executive
Orders
• Impact NLRB appointments and decisions
• Shape DOL regulations
• Change EEOC initiatives
• Impact I-9, E-Verify and immigration rules
Direct administrative agency action
• Push for ACA changes (“repeal and replace”)
• Support paid leave laws
Act in concert with the legislative
branch
• Senate must approve any nomination (60-vote threshold for SCOTUS)
Appoint federal court judges
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On the Chopping Block
Agency rules prohibiting class
action waivers and/or arbitration
Broad joint employer rules under NLRB and
DOL
Handbook and social media
prohibitions by the NLRB
Notification of Employee Rights
NLRB poster (since January 2009)
“Quickie election” NLRB rule
Revised EEO-1 reporting
requirements (due March 2018)
EEOC initiatives (equal pay, LGBT rights, wellness
rules, GINA)
Wage and hour initiatives (FLSA
amendments, “gig economy,” worker
classification)
On the Chopping BlockFederal Contractors
Federal contractor sick pay (effective
1/1/2017)
Fair Pay and Safe Workplaces
Executive Order (for federal contractors)
Federal contractor minimum wage
($10.20/hour as of 1/1/2017)
Expansion of federal contractor nondiscrimination
obligations
Pay transparency rules for federal
contractors
Hiring benchmarks for individuals with
disabilities and veterans
Meanwhile Back in California . .
.
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Employment Law Trends for
2017Wage and hour claims will remain hot
Increased class actions in all areas
Equal pay on the radar
Increase in retaliation/whistleblower claims
More limitations on the hiring process
Additional local sick pay and minimum wage laws
Wage & Hour Rules
New FLSA Salary Requirements
Increased minimum salary requirements for
exempt employees
$47,476 per year
$913 per week
Numbers based on 40th percentile of
earnings of full-time salaried workers in
lowest-wage census region
Pending further court, legislative or presidential
action
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Laws At A GlanceCurrent FLSA FLSA Dec. 1, 2016 California
Minimum salary:
• $23,660/year
• $455/week
Highly compensated employee
exemption:
• $100,000/year
No updates
Salary basis rules do not apply to
teachers, doctors, lawyers,
computer professional exemption
or outside sales
Minimum salary:
• $47,476/year
• $913/week
Highly compensated employee
exemption:
• $134,004/year
Updated every 3 years, beginning
1/20
Salary basis rules do not apply to
teachers, doctors, lawyers,
computer professional exemption
or outside sales
Annual minimum salary (2016)
• $41,600
Annual minimum salary (2017)
• $43,680 (26 or more ees)
• $41,600 (25 or fewer ees)
Increase based on CA minimum
wage increase; No highly
compensated exemption
Salary basis rules do not apply to
outside sales, computer
professional exemption or
physicians
No automatic update Updated automatically every 3
years
Updated with minimum wage changes,
except computer professional and physician pay change annually
California Minimum Salary
Requirements to Rise■California minimum wage increase for employers** with 26 or more
employees:
■1/1/17: $10.50/hr $43,680
■1/1/18: $11.00/hr $45,760
■1/1/19: $12.00/hr $49,920
■1/1/20: $13.00/hr $54,080
■1/1/21: $14.00/hr $58,240
■1/1/22: $15.00/hr $62,400**New minimum salary rule for certain private school employees as of July 1, 2017
California Minimum Salary
Requirements Also to Rise■California minimum wage increase for employers** with 25 or fewer
employees:
■1/1/18: $10.50/hr $43,680
■1/1/19: $11.00/hr $45,760
■1/1/20: $12.00/hr $49,920
■1/1/21: $13.00/hr $54,080
■1/1/22: $14.00/hr $58,240
■1/1/23: $15.00/hr $62,400
**New minimum salary rule for certain private school employees as of July 1, 2017
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San Diego Minimum Wage
Requirements
$10.50 an hour effective 7/11/16
$11.50 an hour as of 1/1/17
Will increase with cost of living annually as of
1/1/19
If California’s minimum wage is higher, will
increase to match higher state minimum wage
Numerous Cities Adopting
Similar LawsLos Angeles and San Francisco following suit
Audit cities in which employees work for minimum
wage and sick pay ordinances
Plus, federal contractor minimum wage increases to
$10.20/hour as of 1/1/2017
Computer Professional
Exemption IncreasesEffective 1/1/17, minimum pay rate to meet CA
computer professional exemption increases
from hourly rate of $41.85 to $42.39
from monthly salary of $7,265.43 to $7,359.88
from annual salary of $87,185.14 to $88,318.55
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California Fair Pay Act
Amendments
New expansions as of January 1, 2017
Now protects race or ethnicity as well as sex
Prior salary cannot justify any disparity in
compensation
California Fair Pay Act
Equal wages for substantially similar work
Performed under similar working conditions
“Pay Equity” vs. “Pay Gap”
Pay Equity
• Employers cannot pay unequal wages for substantially similar work because of sex, race or ethnicity
Pay Gap
• A pay gap may be lawful if the entire gap is based on a permissible employer defense
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Key Terms
• Includes overtime pay, bonuses, stock options, life insurance, vacation and holiday pay and any other similar payments and benefits
Wages
• Does not mean identical
• Disregard job title and focus on overall job content
Substantially Similar Work
“Substantially Similar Work”
Viewed as a composite of:
Skill: education, training, experience, ability and
training to perform a job
Effort: physical/intellectual exertion
Responsibility: the degree of accountability
required in performing a job (i.e., direct reports,
budget, outcomes)
“Performed Under Similar
Working Conditions”
Indoor/Outdoor settings
Weight lifting
Heat/Noise
Cost of living?
Shift differential?
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Employer Defenses
Wage differential based upon one or more of the following factors:
Seniority system;
Merit system;
System that measures earnings by quantity or quality of production; and/or
A bona fide factor other than sex, race or ethnicity; and
Each factor is applied reasonably; and
The one or more factors relied upon account for the entire wage differential
Bona Fide Factor Other Than Sex,
Race or EthnicityEducation, training, experience
Provided employer proves:
Not “derived” from sex, race or ethnicity;
Job-related; and
Consistent with business necessity
Defense not applicable if employee shows alternative business practice serves business interest without wage differential
EEO-1 Pay Data Collection
Employers with 100 or more employees must include
two categories of information in reports:
Ethnicity, race and sex data by job category
Data regarding employees’ W-2 earnings and hours worked,
reported by job category and broken into 12 pay bands
Modified deadline from September 30 to March 31
2017 report due March 31, 2018 (data calculated as of
December 31)
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DLSE Enforcement Activity
Expands (AB 2261)Grants DLSE broad authority under Labor Code 98.7
to bring action against employer who terminates or
discriminates against an employee violation of any law
under Labor Commissioner’s jurisdiction
No employee complaint required
Minimum Wage Violations (AB
2899)Employer contesting Labor Commissioner citation for
failure to pay minimum wages required to post a bond
in amount equal to unpaid wages, damages and
penalties assessed
If employer fails to pay amount owed within 10 days
after conclusion of proceedings, amount forfeited to
employee
California Rest Break Rules
On-duty and on-call rest breaks under California law
are prohibited
Augustus v. ABM Security Services (Cal. 4th 2016)
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Regular Rate of Pay
Payments to employee in lieu of medical insurance
must be included in regular rate for calculating
overtime pay
Flores v. City of San Gabriel (9th Cir. 2016)
Time Rounding
Under FLSA, non-exempt employee’s time can be
rounded to nearest quarter hour if doesn’t reduce pay
to workers over period of time
One minute of uncompensated time is de minimis
violation of FLSA
Corbin v. Time Warner Entertainment (9th Cir. 2016)
Wage Statements (AB 2535)
Wage statements for exempt employees need not
show employee’s total hours worked
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Wage Statements
Accrued vacation does not have be listed on CA pay
stub unless and until they are paid on vacation or
termination
Soto v. Motel 6 Operating LP (Cal. App. 2016)
Suitable Seating Requirements
If tasks performed “reasonably permit” sitting and
providing a seat would not interfere with performance
of any other task that might require standing, a seat
must be provided if requested
Kilby v. CVS Pharmacy, Inc. (Cal. 4th 2016)
CA Supreme Court Open
Questions
• How to calculate OT when employee receives both and hourly rate and a flat sum bonus
Alvarado v. Dart Container Corp. of California
• What test should be used to determine employee/independent contractor status
Dynamex Operations West, Inc. v. Superior Court
• Is the Investigative Consumer Reporting Agencies Act unconstitutionally vague?
Connor v. First Student, Inc.
• Clarify day of rest requirements under CA lawMendoza v. Nordstrom, Inc.
• Does the FLSA de minimis doctrine apply to employee wage claims?
Troester v. Starbucks Corp.
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Discrimination and
Retaliation
CA Amends FEHA Regulations
Effective April 1, 2016 Must distribute detailed policies for preventing harassment,
discrimination and retaliation that:
List all protected characteristics
Allow report to someone other than direct supervisor
Instruct supervisors to report all complaints
State that complaints will be followed by a fair, complete and
timely investigation, confidentiality will be maintained to the
extent possible, remedial action will be taken if misconduct
found, employees won’t be subject to retaliation, and
supervisors, co-workers and third parties are prohibited from
engaging in unlawful behavior under the FEHA
CA Amends FEHA Regulations
Effective April 1, 2016 Policy must be provided to new and current employees, and
receipt should be acknowledged
Must translate policy into other languages if 10% or more of
workers are non-English speakers
No independent cause of action for failing to prevent
harassment if no underlying harassment, but DFEH can obtain
non-monetary remedies for failing to prevent harassment or
discrimination
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CA Amends FEHA Regulations
Effective April 1, 2016 New supervisor training requirements
2-year record-keeping obligation: names of supervisors
trained, training date, sign in sheet, copies of certificates, type
of training, written materials, name of training provider
Audio, video or computer technology can be used in
conjunction with classroom, webinar or e-learning, but use of
such tools alone insufficient
Requires discussion of potential liability and exposure,
supervisors’ obligation to report harassment, discrimination
and retaliation, appropriate remedial action to address
harassment and review of “abusive conduct”
DFEH Issues Guidance on
Transgender Rights Must permit employees to dress consistent with gender identity
Dress code must be enforced in non-discriminatory manner
Right to use restroom or locker facilities corresponding to
gender identity
Where possible, provide single-stall restroom for anyone who
desires more privacy
Legal protection regardless of physical transition
Single User Restrooms to be All
Gender (AB 1732) Beginning March 1, 2017, all single-user restroom in
any CA business establishment, place of public
accommodation or government agency must be
identified as “all gender”
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Unfair Immigration-Related
Practices (SB 1001)While verifying work authorization, employers
prohibited from:
Requesting more/different documents than required under
federal law;
Refusing to honor documents that appear genuine;
Refusing to honor work authorization based on specific status
that accompanies the authorization; or
Attempting to reinvestigate or re-verify an employee’s
authorization using an unfair immigration-related practice
$10,000 penalty
Juvenile Criminal Records Off
Limits (AB 1843)Prohibits CA employers from asking applicants about,
or relying upon, information related to the arrest or
conviction of an applicant as a juvenile
Narrow exception for health care facilities to inquire
about felony or misdemeanor sexual or drug offenses
within the past 5 years
EEOC Targets the Gig Economy
EEOC’s Strategic Enforcement Plan for 2017-2021
emphasizes temporary workers and the “gig”
economy
Also on the radar:
Qualification standards
Inflexible leave policies
Discrimination against LGBT community
Discrimination against Muslims, Sikhs, Arabs, or people of
Middle Eastern or South Asian descent
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Ban the Box Laws Expanding
LA City Council passed ordinance prohibiting city
contractors and private employers with 10 or more
employees from asking about criminal record until
after conditional offer extended
Similar measures implemented in 23 states and more
than 100 cities and counties
FLSA Retaliation
HR Manager’s interactions with the company on the
subject of FLSA compliance, which was not part of her
regular duties, constituted complaints under the FLSA
Rosenfield v. GlobalTranz Enter., Inc. (9th Cir. 2015)
Opposition Retaliation
Opposition to departmental changes and general
advocacy for disabled are not protected activities
under FEHA
Dinslage v. City & Cty. Of San Francisco (Cal. App. 2016)
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Disability Issues and
Accommodation Obligations
“Associational” Discrimination
FEHA protects employees “associated with a person
who has, or is perceived to have” a physical or mental
disability
Three categories generally recognized:
Expense
Disability by association
Distraction
Associational Accommodation?
Failure to schedule employee so he could be home to
administer dialysis to disabled son evidence of
discrimination and retaliation for associating with
someone disabled in violation of FEHA
Separate duty to accommodate disability of
employee’s family members?
Castro-Ramirez v. Dependable Highway Express, Inc. (Cal. App.
2016)
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Showing of Animosity Not
Required to Prove
DiscriminationTo establish disability discrimination, employee need
only show that actual or perceived disability was a
substantial motivating factor for adverse employment
action, not that employer bore disabled employee
animosity or ill will
Wallace v. Cty. of Stanislaus (Cal. App. 2016)
Perceived Disability and
Interactive ProcessAlthough plaintiff had no actual disability, employer
had a statutory duty to accommodate what it
perceived to be her disability
Violation of interactive process may have occurred
where employee was terminated after accommodation
requested but before leave began
Moore v. Regents of University of California (Cal. App. 2016)
Interactive Process
Telling employee to “to go back to his physician” is
insufficient response to employee’s complaints about
whether his job duties were outside of his work
restrictions
Thomsen v. Georgia-Pac. Corrugated, LLC (E.D. Cal. 2016)
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Interactive Process and
Reasonable AccommodationEmployee has the burden of proving that a reasonable
accommodation was available at the time of
termination
Mendoza v. Roman Catholic Archbishop (9th Cir. 2016)
Rules For Leave Accommodation• No obligation to extend a 15-month leave
• Extension of 9-month leave not required
• Extending 8-month leave without identified return to work date not reasonable
“Never ending” leave is not reasonable
• Length of time has not been resolved by a California courtNo duty to “await” a
vacant position
• Providing paid leave is not per se permissibleConsidering options
other than leave
• Must consider changing policy as part of accommodation
• No “eligibility” rules (i.e., length of employment or performance criteria)
Strict adherence to leave or attendance
policy is impermissible
Time Off from WorkPaid or Unpaid
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State Sick Pay Laws
California Connecticut
Massachusetts Oregon
Vermont Arizona (7/1/17)
Washington (1/1/18)
California Local Sick Pay Laws
San Francisco Oakland
Los Angeles Berkeley
Santa Monica (1/1/17) San Diego
Emeryville
San Diego City Sick Pay
Requirements
Employees must accrue sick pay at the rate of 1
hour for every 30 hours worked or be provided
a deposit of 40 hours at the beginning of a 12-
month period
Accrual can be capped at 80 hours
Can limit use to 40 hours within a benefit year
Can limit use until 90th day of employment
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Numerous Other Local Sick Pay
OrdinancesSeattle, Tacoma, Portland, Eugene, Washington D.C.,
Philadelphia
And more . . .
Federal Contractor Sick Pay
Executive Order mandates paid sick leave for federal
contractors
Must receive at least 1 hour for every 30 hours
worked, up to accrual 56 hours
Time is protected
Effective January 1, 2017
Issues to Consider
Multiple laws apply to same employee?
Is a “comprehensive policy” possible?
Consider:
Frontloading
Accrual and cap
Reasons for sick pay (including definition of
family member)
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Increased PFL and SDI Benefits
(AB 908)Effective January 1, 2018, PFL and SDI wage
replacement benefits will increase from 55% to 60 –
70%
Subject to maximum weekly benefit limit
Eliminates 7-day waiting period for PFL
Domestic Violence Leave and
Accommodation Rights (AB 2337)Employers with 25 or more employees must provide
leave and accommodation to victims of domestic
violence, sexual assault or stalking
Employers must provide notice to new employees in
writing and current employees upon request (notice to
be developed by Labor Commissioner by July 1, 2017)
Agreements
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Choice of Law and Forum in
Employment Contracts (SB 1241)Contracts entered into or modified after January 1,
2017 can’t require California employee to:
Agree to litigate or arbitrate California claims outside the
state; or
Apply foreign law to a controversy arising in California
Violation renders agreement voidable
Not applicable if employee represented by counsel
when negotiating terms
Grab Bag
Training Reimbursement
PermissibleEmployee’s agreement to reimburse employer for
training program was lawful and enforceable
USS-POSCO Indus. V. Case (Cal.4th 2016)
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National Labor Relations Board
Workplace rules in handbook requiring that
employees “maintain a positive work environment”
and prohibiting workplace recordings deemed
unlawful
T-Mobile USA, Inc. and Communications Workers of America,
363 NLRB No. 171 (2016)
Smoking Prohibitions Expanded
(ABx2 6, SBx2 6)New workplace smoking prohibitions
Extends smoking ban to vapor or e-cigarettes
Eliminates exemptions for certain types of
employers and working environments
Eliminates ability to have smoking break rooms
Raises legal smoking age to 21
Required Notices (AB 1847)
Employers who must notify employees of eligibility for
federal Earned Income Tax Credit must also notify
employees of eligibility for California’s Earned
Income Tax Credit
