Benefits and Compensation, HR Management & Compliance

A Busy Year for the California Legislature; And Now Employers Must Come Up to Speed

California lawmakers stayed busy throughout the year, passing a number of new wage, hour, leave and anti-discrimination laws.  Here, in no particular order, are some of the biggies that go into effect Jan. 1:

Pregnancy Disability Leave

All employers with five or more employees will be required, starting Jan. 1, 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.

The bottom line is that employees who are not eligible for federal Family and Medical Leave Act leave are eligible for pregnancy disability leave. Continued insurance coverage provided for pregnancy disability leave will not count against an employee’s right to continued benefits under the FMLA if she subsequently becomes FMLA eligible.

Willful Misclassification of Independent Contractors

The law now provides for new penalties of between $5,000 to $25,000 for the “willful misclassification” of independent contractors and 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.

Notice of Pay Details

Recent changes require 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

Organ and Bone Marrow Donor Leave

The law has been clarified to state that employers must allow employees to take up to 30 days of leave annually for organ donation and up to five days of leave annually for bone marrow donation. In addition, the recent changes clarify 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.

Genetic Information

Employers now are prohibited from discriminating against employees on the basis of genetic information. The law applies to employers with five or more employees. (A similar federal law applies to employers with 15 or more employees.)

Interference With Rights Under Leave Laws

Under the California Family Rights Act (CFRA) and the Pregnancy Disability Leave law (PDL) it is now illegal 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).

Administrative Penalties

An employee who alleges a minimum wage violation will be allowed to recover liquidated damages pursuant to any complaint brought before the Division of Labor Standards Enforcement. Until now, California law allowed damages only in complaints made in civil court, not in an administrative proceeding before the Labor Commissioner.

Wage Penalties

An increase in the maximum penalty from $50 to $200 per calendar day for each worker paid less than the determined prevailing wage. The minimum penalty for violations of prevailing wage obligations was increased from $10 to $40 per day. The penalty against contractors and subcontractors that fail to respond to a written request for payroll records within 10 days is increased  $25 to $100 per calendar day, per worker.

Safe Lifting – Hospitals

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 an employer’s injury and illness prevention program.

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