FOR IMMEDIATE RELEASE
December 28th, 2011
EMPLOYMENT LAW UPDATE 2012 By Gerald D.
Bloch, Attorney at Law
1. Use of Credit Reports in Hiring -
AB 22.
- Summary: Narrowly restricts an employer’s
ability to use credit reports in hiring. Private
employers will only be able to use credit reports for individuals applying for
positions that (i) are "managerial”, (ii) give the applicant access to
information of others that is private (e.g., credit card, bank account, social
security numbers, dates of birth), confidential or proprietary, (iii) require
the applicant to be a bank or credit card signatory, authorized to transfer
money or enter into financial transactions, or (iv) give the applicant access
to $10,000 or more of the employer’s funds. The employer is also required to
notify the applicant of which of the above reasons justifies its use of a
credit report for the applicant in addition to current notice requirements.
- Effective Date: January 1, 2012
- Comment/Action:
- Change all handbook policies on background checks and credit reports to
conform to new requirements;
- Make sure the appropriate reason exists for requiring credit reports
and document it.
- Watch for additional legislation from Congress that will further
restrict the use of credit reports in employment.
2.
Independent Contractor Penalties – SB 459.
- Summary: Fines that can be imposed on businesses for
misclassifying employees as independent contractors have been increased from
$5,000 to $15,000 per violation if the misclassification is "willful” and to
$25,000 if there is a "pattern and practice” of willfully misclassifying
employees.
-
Effective Date: January
1, 2012.
- Comment/Action: Expect
regulators to focus more on this issue as a way to increase government
revenues. Carefully review any independent contractors you employ to determine
whether you can legitimately justify that status. If not, make them employees.
3. "Wage Theft Law” (Disclosures to New
Hires) – AB 469.
- Summary: The
following information must be disclosed in writing to all, non-exempt employees
when they are hired:
- The rate and basis of pay, including any rates for
overtime.
- Allowances claimed, including meal or lodging
allowances.
- The regular payday designated by the employer.
- The name of the employer, including any
"dba" names used.
- The physical address of the employer's main office or
principal place of business, and a mailing address, if different.
- The telephone number of the employer.
- The name, address, and telephone number of
the employer's workers' compensation insurance carrier.
Payroll records must be retained for
3 years instead of 2.
- Effective Date: January 1, 2012.
- Comment/Action: A template for the disclosure will be
(but is not yet) available on the Labor Commissioner’s website. Most of the
disclosures are already required in poster form but that is no substitute for
the new requirements. If any of the disclosed information changes, a new
disclosure must be made within 7 days. Change record retention policies to
cover the increased retention period.
4. Written Commission Agreements
Required – AB 1369 (Labor Code §2751)
- Summary:
Commission
arrangements used to compensation employees who perform services must be in
writing stating how the commission will be calculated and paid. Compensation
will be considered a commission if it is based proportionally on the value or
amount of the property or services sold. The requirement will not apply to
"short term productivity bonuses” or profit sharing plans unless based on a
fixed percentage of sales or profits. The employer must give a signed copy of
the agreement to participating employees and must get back a "signed receipt for
the contract”.
- Effective Date: January 1, 2013.
- Comment/Action: Since it has always been good practice to
put commission arrangements in writing, this requirement will be beneficial to
employees by eliminating potential disputes, especially those relating to
whether commissions should be paid after termination of employment, a common
source of litigation.
5.
Prohibition Against
Discrimination Based on Gender Identity and Expression – AB 887.
- Summary:
Existing law (Govt Code §12926, part of the Fair Employment &
Housing Act or "FEHA”) protects individuals against employment discrimination
and harassment based on gender. Although "gender” has been defined to include
"gender identification” and "gender expression”, those terms were not
explicitly included in FEHA. This legislation expands FEHA (and other
anti-discrimination laws) to add "gender identification” and "gender
expression” as protected characteristics.
- Effective Date: January
1, 2012.
- Comment/Action: Though this legislation does not
substantively change existing law, it serves as a reminder that transgender
individuals are protected from discrimination. Employers may still impose
reasonable appearance, grooming or dress code standards but may want to review
their dress code policies to make sure they do not discriminate against
transgender individuals.
6. Prohibition Against Discrimination Based
on Genetic Information (SB 559, Govt Code §12921, 12926).
-
Summary: FEHA has been expanded to prohibit
discrimination on the basis of an individual’s "genetic information”. That
means (i) an individual’s genetic tests, (ii) the genetic tests of the
individual’s family members, or (iii) the manifestation of a disease or
disorder in the individual’s family members. It includes requests for genetic services
or participation in clinical research that includes genetic services by an
individual or any family member.
- Effective Date: January 1, 2012.
- Comment/Action: The new law is consistent with federal law,
called GINA or the Genetic Information
Nondiscrimination Act of 2008.
7. Payment
of Health Coverage to Women on Pregnancy Disability Leave (SB 299 - Govt Code
§12945).
- Summary:
Employers must continue to pay the premiums for group health
insurance coverage for female employees who are on pregnancy disability leave
(who can take up to 12 weeks in a 12 month period). The employer may recover
the cost if the employee fails to return to work after the leave.
- Effective Date: January 1, 2012.
- Comment/Action:
This will increase labor costs and may be hard to budget.
Contact:
CSSA - Erin King - (949) 783-4130
SSA - Tim Dietz - (949) 587-0300 |