Top Five Do's For California Employers
Kelley Drye Client Advisory
March 1, 2013

As 2013 gets underway, you should be aware of several new employment laws that may impact your day-to-day operations and company policies. If you are based in California or have employees in California, you should immediately review and update your employee handbook and applicable policies, procedures and practices to ensure compliance with these new laws. Below is an overview of the top five laws taking effect this year and what you should do to comply with them. There is also a brief summary of other changes you should be aware of.

No. 1  New Requirements for Commissions

As of January 1, 2013, all employers with California-based employees paid in whole or in part on a commission basis must now provide employees with written agreements setting forth the method by which commissions will be calculated and paid. Additionally, if the parties continue to work after the agreement expires, the contract terms are presumed to remain in effect until superseded or terminated in writing. Employees may file a claim against an employer who fails to provide the required written contract.

To Do:

  • Draft written agreements with each employee paid on a commission basis, signed by both the employer and the employee.

  • Provide a signed copy of the contract to each employee.

  • Obtain a signed receipt from the employee stating they understand and received a signed copy of the agreement.

  • Review all employee commission arrangements to ensure they provide the required details in compliance with the law.
No. 2  Wage Statements & Access to Personnel Records

Employers are now required to retain personnel files for at least 3 years following an employee’s termination of employment. The law clarifies that access to personnel files must be given to both current and former employees. Generally, under the law, current and former employees (or their representatives) are entitled to inspect and receive a copy of their personnel records within 30 days of having made a request. Violations of the law constitute an infraction that may result in a penalty of $750, in addition to injunctive relief and attorney’s fees.

To Do:

  • Create, and provide upon request, a written form that current and former employees may use to request access to, and a copy of, personnel records.

  • Ensure procedures for data retention are updated to retain personnel files for 3 years post-termination.
No. 3  New Pregnancy-Related Regulations Adopted

As of December 30, 2012, new pregnancy regulations went into effect, which among other things:

  • clarify that the calculation of “four-months” of unpaid pregnancy disability leave per pregnancy is based on one-third of a year or 17 1/3 weeks and is calculated based on hours instead of days; as such, an employee who works 40 hours a week, is entitled to 693 hours of leave, while an employee who works 20 hours per week, is entitled to 346.6 hours of leave;

  • establish additional reinstatement obligations;

  • require employers to post, and give employees affected by pregnancy, new forms that provide detailed information about pregnancy disability leave and California Family Rights Act leave; and

  • create employer liability for acts of discrimination based on an employee’s “perceived” pregnancy.

To Do:

  • Post updated Notice either physically or electronically, as required based on the number of employees.

  • Provide Notices to all employees upon disclosure of pregnancy.

  • Publish Notices in the employee handbook or, alternatively, distribute annually.

  • Make reasonable efforts to inform employees whose primary language is not English of their rights to pregnancy disability leave, reasonable accommodation and transfer, either verbally or in writing.

  • Translate Notices into any language spoken primarily by at least 10% of the workforce.

  • Upon request, provide a written guarantee of reinstatement to the same or comparable position following leave, provided no legitimate business reasons unrelated to pregnancy exist to do otherwise.
No. 4  FEHA Expanded to Protect Breastfeeding

In an effort to prevent breastfeeding discrimination in the workplace, the California legislature has expanded the scope of discrimination on the basis of “sex” under the California Fair Employment and Housing Act (FEHA) to include breastfeeding and medical conditions relating to breastfeeding. As a result, employees who believe that they are being discriminated against because of breastfeeding now have a cause of action under FEHA.

To Do:

  • Review and update your Discrimination and Harassment Notice to reflect that discrimination on the basis of breastfeeding is illegal.
No. 5  Amended Disability Discrimination and Accommodation Regulations

As of December 30, 2012, employers are required to initiate the interactive process when they become aware of an employee’s need for an accommodation through “observation” or are informed of the need for an accommodation by a third party. “Reasonable accommodation” now explicitly includes reserved parking spaces, modifying supervisory methods and employer policies, permitting telecommuting, and bringing assistive animals to the workplace. Employers must provide accommodations to disabled employees to allow them to “enjoy equivalent benefits and privileges of employment” as similarly situated, non-disabled employees. 

To Do:

  • Review and update your procedure for assessing whether an employee requires a reasonable accommodation.  Train managers to promptly communicate their observations to human resources.

  • Update policies and practices to reflect compliance with the updated California disability discrimination law.
Other Items Affecting California Employers

Employee Social Media Privacy Interests Protected – Employers are now prohibited from requiring or requesting employees or job applicants to:

  • disclose their user name or password information for any personal social media accounts;

  • access personal social media in the presence of the employer; or

  • “divulge” any personal social media.

The law also prohibits an employer from discharging, disciplining, threatening to discharge or discipline, or otherwise retaliating against an employee or applicant for not complying with a request or demand by the employer that violates this law. Limited exceptions include allowing employers to ask employees to divulge their personal social media information for the purposes of an investigation into alleged employee misconduct or violations of law, provided that the social media is used solely for purposes of that investigation or related proceeding.

Religious Accommodation Under the FEHA Enhanced – Employers’ obligations to reasonably accommodate religious beliefs and observances of their employees includes religious dress and grooming practices. The amendments to FEHA provide that “religious dress” and “grooming practices” should both be broadly construed. However, an accommodation that would require an employee to be segregated from the public or from other employees is not a reasonable accommodation and that no accommodation is required if it would result in the violation of specified laws protecting civil rights.

Non-exempt Employee Salaries – In an effort to ensure that employees are paid all earned overtime wages, California law now provides that payment of a fixed salary to a non-exempt employee will be deemed to provide compensation only for the employee’s regular, non-overtime hours, even if there is a private agreement to the contrary between the employer and the employee.

Temporary Services Employers Must Provide Extra Detail on Wage Statements – Beginning July 1, 2013, temporary service employers will have to include the rate of pay for each separate assignment, the name and address of each entity that secured the temporary employee’s services, and the total hours worked for each temporary services assignment on each employee’s wage statement. In addition, wage notices provided to employees at the time of hire must now also include the name, physical address of the main office, mailing address, and telephone number of the entity for whom the employee will perform work, and any other information the Labor Commissioner deems material and necessary.

Wage Statement Violations – Effective January 1, 2013, employees may recover for violations of California Labor Code Section 226, which requires complete and accurate wage statements, even in the absence of evidence of actual injury caused by any alleged deficiency in the wage statement. An employee is deemed to have suffered an “injury” when:

  • the employer fails to provide a wage statement (which may only include the last 4 digits of an employee’s social security number); or

  • the employer fails to provide accurate or complete information as required by any one or more of the nine items listed in Labor Code 226(a) and the employee cannot promptly and easily determine from the wage statement alone one or more of those nine items.

For more information on these developing issues and how to remain compliant and up-to-date, we invite you to contact Kelley Drye & Warren.