Overview new 2012_laws_marketing

An Overview of

New 2012 Laws
Affecting California Employers

Source: CalChamber Staff Counsel

Table of Contents

1. Overview .......................................................................................................................... 2
2. Credit Check .................................................................................................................... 2
3. Pregnancy Disability Leave .............................................................................................. 2
4. Willful Misclassification of Independent Contractors ......................................................... 3
5. Written Commission Agreement ....................................................................................... 3
6. Notice of Pay Details ........................................................................................................ 3
7. Organ and Bone Marrow Donor Leave ............................................................................. 4
8. Genetic Information .......................................................................................................... 4
9. Gender Expression .......................................................................................................... 5
10. E-Verify ............................................................................................................................ 5
11. Interference With Rights Under Leave Laws .................................................................... 5
12. Administrative Penalties ................................................................................................... 6
13. Wage Penalties ................................................................................................................ 6
14. Farm Labor Contractors – Wage Notices ......................................................................... 6
15. Agricultural Labor Relations ............................................................................................. 6
16. Insurance Non-Discrimination Act .................................................................................... 7
17. State Contracts – Gender or Sexual Orientation Discrimination ....................................... 7
18. Apprentice Programs ....................................................................................................... 7
19. Safe Lifting - Hospitals ..................................................................................................... 7
20. Workers’ Compensation Legislation ................................................................................. 8
21. DFEH Procedural Regulations ......................................................................................... 9

Published by CalChamber
1332 North Market Blvd.
Sacramento, CA 95834
(800) 331-8877
www.calchamber.com

© 2011 California Chamber of Commerce. All rights reserved. 1

1. Overview
Several new employment laws will impact California employers’ day-to-day operations and policies in
2012. This white paper runs through a list of these new laws. Unless specified, all new legislation goes
into effect on January 1, 2012.

Keep an eye on the HR Watchdog blog and HR Watchdog on Twitter for frequent updates on
employment related laws, regulations and cases.

2. Credit Check
AB 22 prohibits employers and prospective employers, not including certain financial institutions, from
obtaining and using consumer credit reports (credit information) about applicants or employees.

The prohibition does not apply to “managerial positions,” defined as those who qualify for the executive
exemption from overtime. This exception reinforces the need to make the correct exempt/nonexempt
classification at the time you decide to recruit for an open position.

The prohibition against obtaining and using credit reports also does not apply to the following:

 Law enforcement positions and positions for which the information is required by law
 Positions that involve regular access (other than in connection with routine solicitation and
processing of credit card applications in a retail establishment) to bank or credit card
information, Social Security numbers, and date of birth
 Positions in which the person is, or would be, a named signatory on the employer’s bank or
credit card account, or authorized to transfer money or enter into financial contracts on behalf
of the employer
 Positions that involve access to confidential or proprietary information, as defined
 Positions that involve regular access to cash totaling $10,000 or more of the employer, a
customer, or client during the workday

3. Pregnancy Disability Leave
SB 299 requires all employers with five or more employees to continue to maintain and pay for health
coverage under a group health plan for an eligible female employee who takes Pregnancy Disability
Leave (PDL) up to a maximum of four months in a 12-month period. The benefits are at the same level
and under the same conditions as if the employee had continued working during the leave period.

Under current law, employers were only required to provide benefits for pregnancy leave to the same
extent and for the same length of time as they would for other temporary disability leaves. If the


employer was covered by the federal Family and Medical Leave Act, it had to provide continuing
coverage during the twelve weeks of FMLA leave.

The new law requires group health insurance continuation coverage for all employers with five or more
employees regardless of how they treat other temporary disability leaves and regardless of FMLA
coverage. Employers should review their policies to ensure compliance with this new law.

4. Willful Misclassification of Independent Contractors
SB 459 provides new penalties of between $5,000 to $25,000 for the “willful misclassification” of
independent contractors. Willful misclassification is defined as: “avoiding employee status for an
individual by voluntarily and knowingly misclassifying that individual as an independent contractor.”

The law also imposes joint liability on non-attorney outside consultants who knowingly advise an
employer to treat an individual as an independent contractor to avoid employee status.

5. Written Commission Agreement
AB 1396 requires employers who have commission pay arrangements to put those agreements into a
signed written contract. The written contract must set forth the method by which the commissions will
be computed and paid. If the contract expires but the parties keep working under the expired contract,
the contract terms are presumed to remain in effect unless superseded by a new contract or the
employment relationship is terminated. The bill is effective January 1, 2013. Employers have the
entirety of 2012 to bring their commission agreements into compliance.

6. Notice of Pay Details
AB 469 requires employers to provide nonexempt employees, at the time of hire, a notice that
specifies:

 The rate of pay and the basis, whether hourly, salary, piece commission or otherwise, including
any overtime rate
 Allowances, if any, claimed as part of the minimum wage, including meal and lodging
allowances
 The regular pay day designated by the employer as required under the Labor Code
 The name of the employer, including any “doing business as” names
 The physical address of the employer’s main office or principal place of business and any
mailing address, if different
 The telephone of the employer


 The name, address and telephone number of the employer’s workers’ compensation carrier

The law also requires notice of any other information the Labor Commissioner deems material and
necessary. The Labor Commissioner is to provide a template. The new law only applies to nonexempt
employees, which again highlights the need for properly classifying employees at the time of hire.

If there is any change to the information in the notice, the employer must notify each employee, in
writing, within seven calendar days of the changes, unless such changes are elsewhere reflected on a
timely wage statement or other writing required by law.

This legislation also increases penalties for wage violations and makes further changes regarding
collection of such penalties, including an increase in the statute of limitations.

7. Organ and Bone Marrow Donor Leave
SB 272 clarifies the implementation of California’s organ and bone marrow donor leave law (Labor
Code sections 1508-1512). Existing law provides up to 30 days of leave in a one-year period for organ
donation and up to five days of leave in a one-year period for bone marrow donation. The new
legislation clarifies that the days of leave are business days, not calendar days, and that the one-year
period is measured from the date the employee’s leave begins. Existing law stated that employers’
could require use of sick and vacation leave, but did not mention paid time off (PTO). The new
legislation clarifies that employers can require the use of a specified number of earned but unused
days for PTO.

8. Genetic Information
SB 559 amends the Fair Employment and Housing Act (FEHA) to state that employers are prohibited
from discriminating against employees on the basis of genetic information. The legislature noted that
the range of protection provided by the federal Genetic Information Nondiscrimination Act (GINA) is not
complete for California. Also, FEHA applies to employers with five or more employees while the federal
law applies to employers with 15 or more employees.

Genetic information is defined as information about any of the following:

 The individual’s genetic tests
 The genetic tests of family members of the individual
 The manifestation of a disease or disorder in family members of the individual.


Genetic information includes: any request for, or receipt of, genetic services, or participation in clinical
research that includes genetic services, by an individual or any family member of the
individual. Genetic information does not include information about the sex or age of any individual.

This prohibition against discrimination on the basis of genetic information is in addition to the existing
state law prohibition against discrimination based on a medical condition, including genetic
characteristic.

9. Gender Expression
AB 887 amends the Fair Employment and Housing Act to further define “gender” to include both
gender identity and “gender expression” and to make clear that discrimination on either basis is
prohibited. Current law only uses the term gender identity. AB 887 also amends Government Code
section 12949 relating to dress codes to include that an employee must be allowed to dress
consistently with both the employee’s gender identity and gender expression.

“Gender expression” is defined as “a person’s gender-related appearance and behavior whether or not
stereotypically associated with the person’s assigned sex at birth.” This definition is not a change from
existing law relating to gender identity.

10. E-Verify
AB 1236 relates to the E-Verify program; a federally created program that allows employers to use an
Internet-based system to electronically verify the employment eligibility of newly hired employees.
E-Verify compares Form I-9 documentation against federal government databases to verify
employees’ employment eligibility.

AB 1236 allows employers to continue to choose to use E-Verify, but prohibits California state
agencies and local governments from passing mandates that require employers to use E-Verify.

Several cities in California passed local ordinances requiring the use of E-Verify in certain
circumstances. For example, a Mission Viejo city ordinance requires the city and certain employers
with city contracts to verify the eligibility of new employees through E-Verify. This new law prohibits
such state or local mandates, unless required by federal law or as a condition of receiving federal
funds.

11. Interference With Rights Under Leave Laws
AB 592 adds language to the California Family Rights Act (CFRA) and the Pregnancy Disability Leave
law (PDL) that makes it unlawful to interfere with or in any way restrain the exercise of rights under
these laws. This added language should not be a change to existing employer obligations since this is
already a requirement under the federal Family and Medical Leave Act (FMLA).


12. Administrative Penalties
AB 240 allows an employee that alleges a minimum wage violation to recover liquidated damages
pursuant to any complaint brought before the Division of Labor Standards Enforcement. Existing law
allows such damages in any complaint before a civil court, but not in an administrative proceeding
before the Labor Commissioner. This new law would allow the Labor Commissioner to also award
such damages. Under the new liquidated damages provision, the employee would be entitled to
recover an amount equal to the wages unlawfully unpaid, plus interest.

13. Wage Penalties
AB 551 increases the maximum penalty from $50 to $200 per calendar day for each worker paid less
than the determined prevailing wage and increases the minimum penalty from $10 to $40 per day for
violations of prevailing wage obligations. These obligations apply to certain state or federal contracts
and generally require a set wage that is significantly higher than minimum wage.

It also increases the penalty from $25 to $100 per calendar day, per worker, against contractors and
subcontractors that fail to respond to a written request for payroll records within 10 days.

14. Farm Labor Contractors – Wage Notices
AB 243 amends Labor Code section 226 to expand the information that must be included on pay
statements, but only for farm labor contractors. Employers that are farm labor contractors must now
disclose on the itemized payroll statement furnished to their employees, the name and address of all
legal entities (for example other growers or other farm labor contractors) that secured the employer’s
services. The bill provides that this listing would not create any legal liability on the part of the legal
entity.

15. Agricultural Labor Relations
SB 126 affects certification of bargaining representatives for agricultural employees. Existing California
law prohibits agricultural employers from engaging in unfair labor practices with regard to agricultural
employees electing their labor representatives. Under current law, the Agricultural Labor Relations
Board (ALRB) can refuse to certify an election if it determines that employer misconduct affected the
election result.

The new law, SB 126, provides that if the ALRB finds employer misconduct that “in addition to affecting
the outcome of the election, would render slight the chances of a new election reflecting the free and
fair choice of employees,” then the ALRB can certify the labor union as the exclusive bargaining agent
for employees.


16. Insurance Non-Discrimination Act
Existing California law requires health care service plans and health insurance policies to provide
group coverage to the registered domestic partner of the employee or insured equal to the coverage
provided to the spouses of employees. SB 757 closes an existing loophole and prevents employers
that operate in multiple states from discriminating against same-sex couples by not providing the same
insurance coverage for domestic partners as they do for spouses.

The new law provides that every group health care service plan contract and every group health
insurance policy that is marketed, issued, or delivered to a California resident is subject to the
requirement to provide equal coverage to domestic partners as is provided to spouses,
notwithstanding any other provision of law. Under the new law, even if the employer’s principal place of
business and majority of employees are located outside of California, no policy or certificate of health
insurance marketed, issued or delivered to a California resident shall discriminate between spouses or
domestic partners of a different sex and spouses or domestic partners of a same sex.

A willful violation of this provision by a health care service plan is a crime.

17. State Contracts – Gender or Sexual Orientation Discrimination
SB 117 outlaws the state of California from entering into contracts of more than $100,000 with
companies that discriminate against the employees on the basis of gender or sexual orientation with
regard to benefits. Existing law prohibits discrimination between employees with spouses and
employees with domestic partners. The new law makes it clear that companies doing business with the
state of California cannot deny equal benefits to same-sex spouses.

18. Apprentice Programs
SB 56 changes the audit requirements for apprenticeship programs. Currently, the Division of
Apprenticeship Standards within the Department of Industrial Relations is required to randomly audit
all apprenticeship programs during each five-year period to ensure compliance with specified
requirements, including industry-specific training criteria. This new law eliminates the mandate of
random audits during five-year increments, and instead directs the Division to conduct audits of
apprenticeship programs generally. It also creates requirements for applications for building and
construction trades programs for approval of a new or expanded apprenticeship program.

19. Safe Lifting – Hospitals
AB 1136 provides that general acute care hospitals must maintain a safe patient handling policy for
patient care units, including trained lift teams or training in safe lifting techniques for staff. The safe
patient handling policy must be kept in accordance with the California Occupational Safety and Health
Act and should be part of the Injury Illness and Prevention Program (IIPP) of these specific employers.


20. Workers’ Compensation Legislation
The governor signed these five workers’ compensation bills that were all supported by CalChamber.

 AB 335 – Requires the workers’ compensation administrative director (AD) to work with the
Commission on Health and Safety and Workers’ Compensation (CHSWC) to develop
regulations regarding notices to injured workers; requires AD and CHSWC to develop and
make accessible a booklet written in plain language about the workers’ comp claims process;
streamlines and simplifies other notices to employees.
The new law also states that workers’ compensation notices posted by employers must now
include the website address and contact information that employees may use to obtain further
information about the workers’ compensation claims process and an injured employee’s rights
and obligations, including the location and telephone number of the nearest information and
assistance officer. The administrative director is required to make available on the department’s
website informational material regarding the workers’ compensation claims process, written in
plain English.
 AB 378 – Lowers workers’ compensation costs by establishing guidelines for dispensing
compound drugs, the circumstances under which those drugs would be covered and the
reimbursement amount, and removes the incentives for physicians to refer patients to
pharmacies in which the physician or physician's family has a financial interest.
 AB 397 – Seeks to address the underground economy problem by singling out contractors that
do not have workers’ compensation coverage but requiring contractors that are exempt from
having coverage at the time they are licensed to certify they are still exempt or have gotten
coverage at the time of their license renewal.
 AB 1168 – Lowers costs for employers and insurers by establishing a fee schedule for
vocational experts' services.
 AB 1426 – Streamlines the workers’ comp process and eliminates duplicative bureaucracy and
inconsistency by eliminating the court administrator position.

The governor also signed a Workers’ Compensation related bill that CalChamber took no position on:

 AB 228 – Amends California Insurance Code section 11780.5 to authorize the State
Compensation Insurance Fund (SCIF) to provide workers’ compensation coverage to a
California employer whose California employees temporarily work outside the state and whose
injuries while performing out-of-state work might lead to workers’ compensation liability in some
other state.

Under existing law, SCIF could rightfully deny coverage for out-of-state workers’ compensation
claims, creating the risk of personal injury lawsuits by employees as a result of their employer


not having workers’ compensation insurance coverage in place for such injury claims. The new
law expands coverage through partnerships between SCIF and other qualifying carriers, who
insure workers’ compensation risks in California, and the other states where the California
employees are temporarily working.

21. DFEH Procedural Regulations
Effective October 7, 2011, the Department of Fair Employment and Housing (DFEH) has instituted
new regulations relating to procedures for filing, investigating and processing discrimination and
harassment claims. DFEH is the state agency charged with enforcing the state Fair Employment and
Housing Act and handling complaints of discrimination and harassment. Overall, the regulations make
it easier for claimants to file their complaints and initiate a DFEH investigation.

For example:

 The statute, as written, requires that a complaint filed with the DFEH be “verified.” The new
regulations do not require the claimant to sign the complaint. Instead, the complaint can be
signed by the claimant’s attorney or other designated representative.
 The DFEH will accept an unsigned complaint if neither the claimant nor an authorized
representative can sign it before the statute of limitations expires. The Fair Employment and
Housing Commission, which hears cases brought before it by the DFEH, objected to this
regulation on the ground that it contradicts the statutory requirement, but the DFEH disagreed
and issued the regulation.
 The new procedural regulations allow for liberal construction of complaints.
o For example, if a claimant brings a complaint alleging only discrimination, but the DFEH
believes the facts could support retaliation, the DFEH will construe the complaint to
allege both discrimination and retaliation even though the claimant did not bring any
such claim. As a result, it will be harder for employers to dismiss claims on the ground
that the employee never raised the claim before the DFEH.
 The new procedural regulations allow the DFEH to accept complaints that appear untimely on
their face and investigate whether the complaint actually was brought within the statute of
limitations. This makes it easier for claimants and less likely that employers can have the claim
dismissed at an early stage.

For more information on the DFEH regulations, visit www.dfeh.ca.gov.


Stay Up to Date With
HRCalifornia
Developed by CalChamber’s employment law experts,
HRCalifornia keeps you constantly updated on the
California and federal employment laws that affect
your business.

HRCalifornia also provides tools to help you stay in
compliance. These include forms, checklists,
compliance wizards, Q&As, and an extensive HR
Library that explains employment law in plain English.

Two Ways to Get HRCalifornia
1. Buy a Subscription: $399 for 12-Month Access

 Unlimited access to HRCalifornia’s expert HR compliance resources
 Order online at www.hrcalifornia.com/subscribe or call (800) 649-4921.
 Visit www.hrcalifornia.com/overview for more information and product tours.

2. Call (800) 649-4921 to Become a Preferred Member: Starting at $599 per Year

LABOR LAW HELPLINE, DISCOUNTS AND MORE:

 Unlimited access to HRCalifornia, our California-specific, continually updated online resource for
employment law
 Unlimited calls to Labor Law Helpline’s HR advisers
 A 20% discount on CalChamber products and online training
 34 issues of Alert, our advocacy newsletter covering business and legislative issues
 24 issues of the members-only edition of HRCalifornia Extra, our employment law eNewsletter
 Business partner discounts from FedEx, UPS, OfficeMax and more, with participating members
saving an average of more than $500 per year

Overview new 2012_laws_marketing

More Related Content

What's hot

Viewers also liked

Similar to Overview new 2012_laws_marketing

Recently uploaded

Overview new 2012_laws_marketing