Governor Jerry Brown recently vetoed four of the five bills the California Chamber of Commerce identified as “job killers.” The one job-killer bill signed into law is Assembly Bill 22, which severely restricts a prospective employer’s use of credit reports to screen applicants.
In addition, the governor approved bills that require you to provide up to four months of medical benefits for employees taking pregnancy disability leave (PDL), expressly prohibit discrimination based on genetic information, gender identity, and gender expression, subject you to penalties for willfully misclassifying independent contractors, require you to provide specified wage information to new hires, and require written commission agreements.
Today and tomorrow, Cathleen Yonahara of Freeland Cooper & Foreman in San Francisco walks us through the important new changes.
You can’t request credit reports for most applicants
Under current state law, you may request a credit report for employment purposes provided you satisfy certain notice and disclosure obligations. Assembly Bill 22, effective January 1, 2012, prohibits employers, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the position is:
- managerial;
- in the California Department of Justice;
- a sworn peace officer or other law enforcement position;
- a position for which the law requires the information contained in the report to be disclosed or obtained;
- one that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment;
- one 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 its behalf;
- one that involves access to confidential or proprietary information; or
- one that involves regular access to $10,000 or more in cash.
You must provide a written notice to the applicant or employee that specifies which of the above exceptions applies.
How to Comply with California Wage & Hour Law — newly updated for 2012!
You must provide medical benefits during PDL
Under the California Fair Employment and Housing Act (FEHA), employers with five or more full- or part-time employees are required to provide up to four months of PDL for employees who are disabled by pregnancy, childbirth, or related medical conditions. Under current law, while an employee is on PDL, she is entitled to participate in health plans and other benefits to the same extent as and under the same conditions that would apply to any other unpaid disability leave.
Under the Family and Medical Leave Act (FMLA) and the California Family Rights Act (CFRA), which apply to employers with 50 or more employees, covered employers must maintain the employee’s health coverage for up to 12 workweeks from the date leave first begins under PDL and the FMLA. Thus, under current law, many California employers limit health care coverage for employees disabled by pregnancy or childbirth to 12 workweeks, and some smaller employers don’t continue to pay for any health care coverage during PDL.
Under Senate Bill 299, effective January 1, 2012, an employer with five or more employees must maintain and pay for coverage under its group health plans for the duration of the PDL ― up to four months — at the level and under the conditions coverage would have been provided if the employee had continued in employment continuously for the duration of the leave. Thus, if you normally pay the full premium for health care coverage, you must continue to do so for up to four months of PDL.
However, if the employee normally pays a portion of the premium, you may require her to continue making her normal contributions during the PDL. Of course, you may voluntarily choose to provide additional health care continuation coverage beyond four months. For state agencies, the collective bargaining agreement governs the employee’s receipt of health care coverage during PDL.
Under the new law, you may recover from the employee the health care premiums you paid if she fails to return from leave after its expiration, provided the failure to return isn’t due to the employee taking CFRA leave, a continuing disability, or other circumstances beyond her control.
No interference with PDL or CFRA rights
Senate Bills 299 and 592 make it unlawful to interfere with, restrain, or deny the exercise or the attempt to exercise an employee’s rights under the PDL law or the CFRA, respectively. You should avoid discouraging employees from taking PDL or CFRA leave, “suggesting” that they delay PDL or CFRA leave to accommodate your business needs, granting shorter extensions of leave than requested, or otherwise denying or interfering with eligible employees’ requests to take PDL or CFRA leave.
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No gender identity, gender expression discrimination
As discussed in the September 26, 2011, issue of California Employment Law Letter (see “Governor approves new employment laws”), Governor Brown recently approved a bill that added genetic information as a prohibited basis of discrimination. On October 9, the governor signed another bill that amended the FEHA to expressly identify other protected characteristics.
The FEHA prohibits discrimination based on “sex,” which includes “gender” as defined in a Penal Code section that in turn defines the term to include gender identity and gender-related appearance and behavior. Senate Bill 87 amends the FEHA to explicitly enumerate “gender identity ” and “gender expression” as protected categories. 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.
Senate Bill 87 also amended the Unruh Civil Rights Act to expressly prohibit business establishments from discriminating on the bases of gender identity and gender expression.
Tomorrow, we’ll look at new laws relating to independent contractor misclassification penalties and wage information for new hires.
Download your free copy of Who’s Entitled To Overtime: How To Avoid Mistakes When Classifying California Employees today!