2018 Hiring Trends

2018 Hiring Trends: Increasing Focus on Retention

Competition for talent in California is only getting more intense. Low unemployment rates (just 2.8% in Sonoma County for December 2017) coupled with lagging labor force participation and growing skills gaps are making it increasingly more difficult for employers to find and retain qualified candidates. In a statewide survey of hiring managers conducted by the staffing company Nelson, California employers named “talent acquisition and management” the number one challenge their businesses currently face.

If your company is trying to compete for talent in Sonoma County, one of the best strategies you can employ in 2018 is actually to shift some of your focus away from hiring and recruitment and toward retention strategies to help ensure you retain your top talent and reduce the need for hiring-related challenges before they even begin.

Why Focus on Retention?

Employers spend, on average, around a third of a manager’s annual salary to hire a replacement–or more than six times that if the employee’s role is highly specialized role. Total costs can easily add up to the tens of thousands of dollars. And that doesn’t take into account the cost of your current employees’ time when they drop their regular responsibilities to focus on reviewing resumes, interviewing, training, or picking up slack elsewhere.

Turnover’s impact extends far beyond higher direct recruiting costs: it can negatively affect productivity, morale, and retention, and hiring. When employees leave, gaps in coverage, skills, and knowledge may result morale dropping, missed goals, and burnout, which can lead to further drop in productivity or more resignations. Plus, new employees must be trained, which delays return to previous level of productivity.

These unspoken costs can contribute to even higher recruiting costs, and thus more turnover. Negative reviews on Glassdoor or other company review sites or a lack of employee referrals, or even unenthusiastic interviewers can all make recruiting harder AND more expensive.

How to Improve Retention
To slow the revolving door and reduce turnover, there are a variety of effective strategies employers can use.   

1.      Understand Every Employee is a Potential Job Seeker

Millennials are more likely than Gen Xers or Baby Boomers to consider leaving their roles in the next two years, and TopResume estimates that that 73% of workers are open to hearing about new opportunities. As an employer, you first need to be constantly aware of the state of your workforce and proactively plan retention efforts.

2.      Provide Growth Opportunities

Invest in retention strategies to increase the likelihood that employees will want to stay and grow with your company. Prove to your employees you want them to stay by defining and sharing paths for upward trajectory within your company and providing training to achieve those next steps. 

3.      Train Leaders

If employees are leaving because of the culture or their direct manager(s), you can create opportunities for retention by making sure your managers and leaders are trained to effectively manage conflict.

4.      Boost Compensation, Benefits, and Perks

In Nelson’s survey, more California employers reported this year that new-hire salaries were holding steady or rising. This reveals that wages–mostly stagnant since the recession–are beginning to creep up, at least for new hires. Despite this, only 2 percent of employers reported providing a standard salary increase of 5 percent or more for current employees. Employers need to be cautious of higher turnover rates caused by employees switching jobs in search of salary increases, more perks, or better benefits.

While it may not be in the budget to offer pay increases across the board, consider the costs of recruiting and hiring. If you can offset those costs with even a fraction of what you’d spend to hire new employees, you can show employees that you’re invested in their long-term stay with the company.

5.      Pay Attention to Workplace Culture, Social Responsibility, and Other Factors

Your culture matters. Today’s employees want to feel like they’re doing a job that matters and connected to colleagues. Whether it’s monthly lunches, stand-up meetings, parties and celebrations, dress-down Fridays, or group charity projects, work with your teams to ensure a consistent, positive workplace culture that supports your employees.

6. Consider Outsourcing More Hiring Efforts to Focus Internal Resources on Retention

While outsourcing retention efforts can be difficult because you know your team best and which strategies will be most effective, you may be able to outsource some of your hiring initiatives. The increased efficiencies and pools of pre-selected talent staffing companies offer may allow you to save time and resources, which can be redeployed towards your retention efforts.

By employing these tactics, your company can reduce your turnover and increase your chances of workforce success in today’s low-unemployment environment.

Prepared by Nelson.

www.nelsonjobs.com

Great tips on what to do if ICE Visits

What To Do If Federal Immigration Authorities Arrive Unannounced

Immigration officers such as Immigration and Customs Enforcement (ICE) or Citizenship and Immigration Services (USCIS) or others may arrive unannounced at a workplace or other commercial property to inspect I-9 records, conduct an administrative site visit for a compliance review, request certain documents with a subpoena, or apprehend individuals. Under California law the company, property owner and other people who are physically present are prohibited from giving consent for law enforcement to enter nonpublic areas of the workplace or commercial property for immigration enforcement unless the officers present a judicial warrant (signed by a judge). California law also prohibits release of documents or records to immigration officers unless the officers present a judicial warrant, except for I-9 Notices of Inspection. Unannounced visits by law enforcement are stressful and employees or occupants generally feel pressure to do whatever law enforcement officers ask of them in the moment.  It’s important for individuals who greet visitors to the business or property that they are not necessarily required to do whatever immigration officers request.  The tension is alleviated when employees and occupants understand in advance that they don’t need to give consent and may not have the authority to give consent.  In many cases all they need to do is collect some information from the law enforcement officers and then contact a person at the company or the property owner who is authorized to represent the company in law enforcement situations and can determine whether a judicial warrant is involved.

Warrants, Subpoenas and Consent

Typically immigration officers are acting on civil, not criminal, authority. The warrants and subpoenas these officers use to request documents, information and access to a workplace or private property, or to apprehend individuals, generally are administrative warrants signed by someone at their own agency (not judicial warrants signed by a judge). Administrative warrants do not authorize officers to enter nonpublic areas of the workplace or property, without proper consent of the company or property owner.

Under California law, company officers and employees and private property owners and occupants are prohibited from giving consent, providing documents, or helping federal immigration officers access nonpublic areas of the workplace or property, unless the officers have a judicial warrant properly signed by a judge with jurisdiction over the matter. In fact, most employees don’t even have the authority to give consent on behalf of the company.  In some cases the occupant of a private property (for example, a guest) doesn’t have authority to give consent to enter the property.  Once consent is given, even if it violates California law, and the officer enters private areas of the premises, even if the person didn’t have authority to consent, it can be hard to unwind the damage done. . It can be difficult to distinguish among different kinds of warrants and subpoenas.  So it is best to consult counsel if any type of warrant or subpoena is presented.

USCIS officers conduct unannounced site visits to confirm that sponsored foreign nationals are employed as described in the company’s approved immigration application, and these site visits do not require a warrant or subpoena. Federal immigration officers generally have no greater access to personnel records than any member of the public unless they have a judicial warrant. An important exception is immigration records (not the full personnel file) for foreign nationals sponsored by the company for employment.  Immigration officers conducting routine visits should be referred to a company officer who has the authority to act on behalf of the company in a law enforcement situation and who can determine whether a judicial warrant is required and which company records the officers may inspect to confirm immigration status of employees.

If the purpose of the visit is to inspect I-9 records, the company doesn’t have to agree to a same-day inspection. Immigration officers tend to arrive at the workplace and request to inspect the I-9s immediately. But the law provides employers three days to respond to an I-9 Notice of Inspection. Always request the three days to respond, so you can organize your I-9 records and respond in an orderly manner without inadvertently allowing law enforcement officers to review personnel records or other information outside the authorized scope of an I-9 inspection, or information for which a judicial warrant is required under California law. Under California law employer are required to provide notice of I-9 inspections to all employees within 72 hours.  It’s best to send the I-9 Notice of Inspection to counsel for review immediately and to discuss next steps with counsel including the required notification to employees.  Employers may face significant fines for I-9 violations even if they are technical violations on I-9s for U.S. workers.

Federal law prohibits hiding evidence, concealing individuals who are the targets of law enforcement, or interfering with an arrest. Also it’s important for employees to avoid putting themselves in physical danger during any immigration enforcement action at the workplace. Immigration officers sometimes may exercise criminal enforcement powers or may work with criminal law enforcement officers who may present a criminal arrest or search warrant that gives greater authority to enter areas of the workplace that are not open to the public.

Individuals who are targets of immigration enforcement actions have civil rights under U.S. law regardless of their citizenship or immigration status. For example, individuals are not required to allow law enforcement to enter their residence or nonpublic areas of a property unless the officers have a judicial warrant (signed by a judge). The American Civil Liberties Union (ACLU) has prepared one-page “Know Your Rights” flyers and offers red cards that individuals can slide under a door to assert their civil rights without opening the door and thus giving consent to immigration officers to enter. Copies of the ACLU “Know Your Rights” flyers are attached (in English, Spanish and French).  Please feel free to distribute or post these flyers in any way you see fit, to educate your business colleagues and employees, the community and targeted individuals about their rights in immigration enforcement actions.

Establish a Company Protocol

It’s important to establish a protocol to follow if immigration officers or other law enforcement officers come to the workplace or a commercial property.  Determine who has the authority to act on behalf of the company or the property owner in immigration enforcement matters, and of those individuals, who are the individuals responsible for doing so if immigration officers arrive unannounced at the workplace. Communicate this information widely so every employee or occupant understands whether they personally have the authority to act on behalf of the company in a law enforcement situation and, if so, whether they personally are responsible for doing so or should convey the information to another company officer who is the responsible party in the moment when law enforcement arrives unannounced.

Immigration officers tend to encounter first the employees who greet and admit visitors to nonpublic areas of the workplace. But admitting customers and vendors for routine business is very different than admitting law enforcement to nonpublic areas of the business to review documents or apprehend individuals. Employees who first interact with law enforcement officers upon arrival simply should ask the officers for their names, identification numbers and agency affiliation; ask for a copy of the warrant or subpoena; and inform the officers that they need to contact the company officer who has the authority to act on behalf of the company in this situation.

Don’t Give Consent Or Release Information - Follow Company Protocol

If an immigration officer presents a warrant or subpoena seeking records or information for immigration enforcement, or is ask to enter nonpublic areas of a business or property, know first and foremost that California law prohibits giving consent to immigration officers in most situations.  Follow company protocol by gathering basic information from law enforcement officers and then contact the appropriate company officer or the property owner.

Leigh Cole

lcole@hkemploymentlaw.com

www.hkemploymentlaw.com

 

August 2017 Legal Update

By Jennifer Douglas Phillips | DP&F Labor and Employment Partner | www.dpf-law.com

Richard Esparza v. KS Industries, L.P.  (August2, 2017) 2017 Cal.App. LEXIS 674

This case is a step forward for employers seeking to enforce arbitration agreements and limiting potential runaway Private Attorney General Act (“PAGA”) claims.   Employers with valid arbitration agreements can force employees to arbitrate unpaid wage claims even if the unpaid wages are sought as penalties under the Labor Code.  Since the 2014 California Supreme Court ruling in Iskanian v. CLS Transportation Los Angeles, LLC any penalties under the Labor Code, including those for unpaid wages, were considered exempt from arbitration if brought as part of a PAGA action. 

Esparza sought a PAGA action against KS Industries seeking civil penalties that would go to the state and unpaid wages that would go to individual aggrieved employees under Labor Code Section 558.  Under PAGA an aggrieved employee can stand in the shoes of the Labor Commissioner to collect civil penalties for all aggrieved employees impacted by specific Labor Code violations.  The civil penalties collected are then distributed 75% to the state and 25% divided among all the aggrieved employees.  In contrast, the unpaid wages are paid directly to the aggrieved employees. 

Esparza signed a valid arbitration agreement with KS Industries.  The trial court denied KS Industries motion to compel arbitration based on Iskanian.  The appellate court examined Iskanian and the Federal Arbitration Act and held that PAGA claims are excluded from arbitration if the recovery sought is strictly civil penalties.  The reasoning is that because the state of California is not a party to the arbitration agreement and the PAGA action for civil penalties is essentially an action in its name, those claims cannot be subject to the arbitration agreement between the employee and employer.   However, if the employee seeks unpaid wages for himself, even if those unpaid wages are considered “penalties” under the Labor Code, then those claims are subject to the binding arbitration agreement.

The appellate court sent the case back to the trial court for Esparza to clearly indicate if he was seeking unpaid wages.  If he is seeking unpaid wages the trial court is directed to stay the PAGA action pending the outcome of his individual arbitration hearing.  If he drops his wage claims then the PAGA action can proceed with the civil penalty portion only. 

This is a significant victory for employers.  It is also an opportunity to consider implementing an arbitration agreement if you do not currently have one.

Minnick v. Automotive Creations, Inc., (July 28, 2017) 13 Cal.App. 5th 1000

This case clarifies an employer’s right to limit vesting of vacation time for new employees.  It is well established law under the seminal case of Suastez v. Plastic Dress-Up Co., that once vacation is earned in California it cannot be taken away.  In this case Automotive Creations’ policy stated employees earned one week of vacation “after completion of one year service and a maximum of two weeks’ vacation after two years of service.”

Minnick left Automotive Creations after six months of service.  Automotive Creations did not pay him for any accrued vacation time in his final paycheck because he had not worked for the company for one year.  Minnick sued for accrued vacation wages on behalf of himself and similarly situated employees who left before completing one year of service.

The key is when vacation was earned under the employer’s policy.  In Suartez the policy at issue stated that employees earned a one-week vacation during the first year of employment.  In looking at that policy the court found the employee began accruing vacation time on the first day of employment and thus had “earned” the vacation wages as each day progressed.  If the employee left before the end of the first year the accrued vacation wages up until the last day of work would need to be paid out in the final paycheck.  In contrast, the Automotive Creations policy clearly stated that the vacation was not earned until after completion of one year service. 

California employers are not required to provide paid vacation.  Employers can also lawfully restrict the amount of vacation employees can accrue at any one time by placing caps on employees’ accrual.  By logical extension, the Minnick court clarified that an employer can properly decide it will provide paid vacation after a specified waiting period.  

The wording of the vacation policy is critical.  Make sure that any entitlement to vacation time is clearly defined to minimize any ambiguity as to when it is earned.

Revised New Form I-9 – Must Use Starting September 18, 2017

Just to keep us all on our toes the United States Citizen and Immigration Services (“USCIS”) issued a revised Form I-9.  The changes are not significant but employers must use it starting September 18, 2017. 

Notice of Rights of Domestic Violence, Sexual Assault and Stalking

Employers with 25 or more employees must give employees notice of their rights under Labor Code Sections 230 and 230.1 to take leave and/or to receive accommodations related to being the victim of domestic violence, sexual assault or stalking.  The notice must be provided at the time of hire and to current employees upon request. The notice requirement took effect July 1, 2017. The Labor Commissioner’s office recently published a notice with the required information.  Employers do not have to use the notice as long as substantially the same information is provided.  Employers can find the notice on the Labor Commissioner’s website at:   https://www.dir.ca.gov/dlse/Victims_of_Domestic_Violence_Leave_Notice.pdf

Four Pending Bills in California Legislature to Watch

1.     AB-1008 – Ban the Box:  This would extend to private employers the prohibition of asking applicants if they have ever been convicted of a crime.

2.     AB-168 – Prohibition of Salary History Inquiry:  We’ve been advising employers not to ask a job applicant salary history questions since passageto pay equity act prohibiting salary history as the sole basis of pay discrepancy.  Best not to even have that information in the file.  Now the legislature is hoping to make this law. If passed, this bill would also require employers to provide a pay scale for the position applied for to applicants upon request.

3.     SB-63 – Extends Baby Bonding Leave to Employers with 20 or more Employees:  California Family Rights Act (“CFRA”) requires employers to provide up to 12 weeks unpaid leave to employees to bond with a new child within one year of the child’s birth, adoption or foster care placement.  This law would extend the same entitlement to employees who work for employers with 20 or more employees within a 75 mile radius.  It extends only the baby-bonding entitlement of CFRA.  There would be no entitlement for time off for the employee’s serious health condition or the serious health condition of a family member.

4.     AB-1565 – Increase in Minimum Exempt Salary:   In reaction to the DOL’s failed overtime regulation, this law would increase the minimum threshold for exempt salary as of January 1, 2018 to $47,472 annually.  More specifically, this law would make the minimum monthly salary $3,956 or an amount no less than twice the state minimum wage for full-time employment, whichever is higher.   If not passed the minimum thresholds for exempt salary January 1, 2018 will be $43,680 ($10.50) for employers with 25 or fewer employees and $45,760 ($11.00) for those with 26 or more.  As of January 1, 2019 under existing law the salaries would be $45,760 ($11.00) and $49,920 ($12.00) respectively.  This proposed law would accelerate the increase in minimum salaries for the years 2018 and 2019 only.  Thereafter, the state minimum thresholds would automatically be higher.

Employment Law update August 2017

August 2017 Legal Update

By Jennifer Douglas Phillips

DP&F Labor and Employment Partner

www.dpf-law.com

Richard Esparza v. KS Industries, L.P.  (August2, 2017) 2017 Cal.App. LEXIS 674

This case is a step forward for employers seeking to enforce arbitration agreements and limiting potential runaway Private Attorney General Act (“PAGA”) claims.   Employers with valid arbitration agreements can force employees to arbitrate unpaid wage claims even if the unpaid wages are sought as penalties under the Labor Code.  Since the 2014 California Supreme Court ruling in Iskanian v. CLS Transportation Los Angeles, LLC any penalties under the Labor Code, including those for unpaid wages, were considered exempt from arbitration if brought as part of a PAGA action. 

Esparza sought a PAGA action against KS Industries seeking civil penalties that would go to the state and unpaid wages that would go to individual aggrieved employees under Labor Code Section 558.  Under PAGA an aggrieved employee can stand in the shoes of the Labor Commissioner to collect civil penalties for all aggrieved employees impacted by specific Labor Code violations.  The civil penalties collected are then distributed 75% to the state and 25% divided among all the aggrieved employees.  In contrast, the unpaid wages are paid directly to the aggrieved employees. 

Esparza signed a valid arbitration agreement with KS Industries.  The trial court denied KS Industries motion to compel arbitration based on Iskanian.  The appellate court examined Iskanian and the Federal Arbitration Act and held that PAGA claims are excluded from arbitration if the recovery sought is strictly civil penalties.  The reasoning is that because the state of California is not a party to the arbitration agreement and the PAGA action for civil penalties is essentially an action in its name, those claims cannot be subject to the arbitration agreement between the employee and employer.   However, if the employee seeks unpaid wages for himself, even if those unpaid wages are considered “penalties” under the Labor Code, then those claims are subject to the binding arbitration agreement.

The appellate court sent the case back to the trial court for Esparza to clearly indicate if he was seeking unpaid wages.  If he is seeking unpaid wages the trial court is directed to stay the PAGA action pending the outcome of his individual arbitration hearing.  If he drops his wage claims then the PAGA action can proceed with the civil penalty portion only. 

This is a significant victory for employers.  It is also an opportunity to consider implementing an arbitration agreement if you do not currently have one.

Minnick v. Automotive Creations, Inc., (July 28, 2017) 13 Cal.App. 5th 1000

This case clarifies an employer’s right to limit vesting of vacation time for new employees.  It is well established law under the seminal case of Suastez v. Plastic Dress-Up Co., that once vacation is earned in California it cannot be taken away.  In this case Automotive Creations’ policy stated employees earned one week of vacation “after completion of one year service and a maximum of two weeks’ vacation after two years of service.”

Minnick left Automotive Creations after six months of service.  Automotive Creations did not pay him for any accrued vacation time in his final paycheck because he had not worked for the company for one year.  Minnick sued for accrued vacation wages on behalf of himself and similarly situated employees who left before completing one year of service.

The key is when vacation was earned under the employer’s policy.  In Suartez the policy at issue stated that employees earned a one-week vacation during the first year of employment.  In looking at that policy the court found the employee began accruing vacation time on the first day of employment and thus had “earned” the vacation wages as each day progressed.  If the employee left before the end of the first year the accrued vacation wages up until the last day of work would need to be paid out in the final paycheck.  In contrast, the Automotive Creations policy clearly stated that the vacation was not earned until after completion of one year service. 

California employers are not required to provide paid vacation.  Employers can also lawfully restrict the amount of vacation employees can accrue at any one time by placing caps on employees’ accrual.  By logical extension, the Minnick court clarified that an employer can properly decide it will provide paid vacation after a specified waiting period.  

The wording of the vacation policy is critical.  Make sure that any entitlement to vacation time is clearly defined to minimize any ambiguity as to when it is earned.

Revised New Form I-9 – Must Use Starting September 18, 2017

Just to keep us all on our toes the United States Citizen and Immigration Services (“USCIS”) issued a revised Form I-9.  The changes are not significant but employers must use it starting September 18, 2017. 

Notice of Rights of Domestic Violence, Sexual Assault and Stalking

Employers with 25 or more employees must give employees notice of their rights under Labor Code Sections 230 and 230.1 to take leave and/or to receive accommodations related to being the victim of domestic violence, sexual assault or stalking.  The notice must be provided at the time of hire and to current employees upon request. The notice requirement took effect July 1, 2017. The Labor Commissioner’s office recently published a notice with the required information.  Employers do not have to use the notice as long as substantially the same information is provided.  Employers can find the notice on the Labor Commissioner’s website at:   https://www.dir.ca.gov/dlse/Victims_of_Domestic_Violence_Leave_Notice.pdf

Four Pending Bills in California Legislature to Watch

1.       AB-1008 – Ban the Box:  This would extend to private employers the prohibition of asking applicants if they have ever been convicted of a crime.

2.       AB-168 – Prohibition of Salary History Inquiry:  We’ve been advising employers not to ask a job applicant salary history questions since passageto pay equity act prohibiting salary history as the sole basis of pay discrepancy.  Best not to even have that information in the file.  Now the legislature is hoping to make this law. If passed, this bill would also require employers to provide a pay scale for the position applied for to applicants upon request.

3.      SB-63 – Extends Baby Bonding Leave to Employers with 20 or more Employees:  California Family Rights Act (“CFRA”) requires employers to provide up to 12 weeks unpaid leave to employees to bond with a new child within one year of the child’s birth, adoption or foster care placement.  This law would extend the same entitlement to employees who work for employers with 20 or more employees within a 75 mile radius.  It extends only the baby-bonding entitlement of CFRA.  There would be no entitlement for time off for the employee’s serious health condition or the serious health condition of a family member.

4.       AB-1565 – Increase in Minimum Exempt Salary:   In reaction to the DOL’s failed overtime regulation, this law would increase the minimum threshold for exempt salary as of January 1, 2018 to $47,472 annually.  More specifically, this law would make the minimum monthly salary $3,956 or an amount no less than twice the state minimum wage for full-time employment, whichever is higher.   If not passed the minimum thresholds for exempt salary January 1, 2018 will be $43,680 ($10.50) for employers with 25 or fewer employees and $45,760 ($11.00) for those with 26 or more.  As of January 1, 2019 under existing law the salaries would be $45,760 ($11.00) and $49,920 ($12.00) respectively.  This proposed law would accelerate the increase in minimum salaries for the years 2018 and 2019 only.  Thereafter, the state minimum thresholds would automatically be higher.

2017 Employment Law Update – Top Ten Changes

Carle Mackie Power and Ross

Happy New Year!  Now that we are back from the holidays, it’s time to dust off the employee handbook, review your policies and procedures, and make sure they are compliant with the new employment laws taking effect in 2017.  This year, we have a combination of new laws, and existing laws that have been updated with additional protections.

1. California Minimum Wage Raised – On January 1, 2017, employers of 26 or more employees must pay $10.50 per hour as the minimum wage.  Employers of less than 26 employees will not be required to raise the minimum wage to $10.50 until beginning January 1, 2018.  Action: Review your pay policies to ensure they meet the minimum wage requirements.  Please note that many cities and counties in California have passed higher minimum wage requirements (Berkeley, Cupertino, El Cerrito, Emeryville, Los Altos, Los Angeles City and County, Malibu, Mountain View, Oakland, Palo Alto, Pasadena, Richmond, San Diego, San Francisco, San Jose, San Leandro, San Mateo, Santa Clara, Santa Monica and Sunnyvale).

2.  Federal Salary Basis Adjustment – Under state and federal law, employees may be deemed exempt from overtime if their positions meet certain criteria, including salary paid above a set rate.  In May of 2016, the DOL amended the federal rule to increase the minimum salary requirement from $455 per week to $913 per week ($47,476/year) exceeding the minimum salary set by California.  This new salary minimum was scheduled to go into effect on December 1, 2016.  However, the rule change was put on hold while the question of whether the DOL exceeded its authority in making this new rule is litigated.  The DOL may end up withdrawing the rule when the new administration takes over.  Thus, the California minimum salary requirement of two times the minimum wage (now $41,600 for employers under 26 people and $43,680 for larger employers) remains in effect.  Action: Ensure your pay policy meets the minimum salary requirement for all exempt employees as the minimum wage increases.  Also, keep an ear out for any policy shifts from the DOL as the administration changes.

3. Change to the I-9 Form – The government has issued a new I-9 form that must be used beginning January 1, 2017 for all new employees.  The form is available online at the USCIS website:  www.uscis.gov/i-9

4. California’s Legalization of Recreational Marijuana Use – With the passage of Proposition 64, California now allows people over the age of 21 to smoke or ingest marijuana, grow up to 6 plants and transfer up to 28.5 grams of marijuana without compensation.  Employers may implement policies limiting the use of marijuana by their employees, up to and including total prohibition.  Action: (i) Confirm your company’s stance on employee marijuana use (both on and off the clock); (ii) review your employee handbook to make sure it is consistent with your position; (iii) make necessary changes to the handbook; and (iv) communicate those changes to employees.

5. Trade Secrets [Handbook Edits Suggested] – In May of 2016, a federal law was created governing trade secrets, which supplements existing California law.  The federal law is substantially similar to the laws in California, but provides a better mechanism for immediate relief from trade secret misappropriation, along with the ability to seek punitive damages and reasonable attorney’s fees and costs.  Action: To take advantage of the new federal law, employers must notify their employees that whistleblowers of trade secret violations will receive criminal and civil immunity against claims of trade secret misappropriation so long as the report was made confidentially to a federal, state or local government official, an attorney or under seal in a lawsuit.  The inclusion of this notice into new agreements governing confidential information or trade secrets and in handbooks is voluntary, but makes these significant additional remedies available to the employer.

6.  Notice Required of Leave Available for Victims of Domestic Violence, Sexual Assault or Stalking [Handbook Edits Required] – Several years ago, Labor Code 230.1 was enacted, requiring employers of 25 or more employees to provide time off to victims of domestic violence, sexual assault or stalking to obtain medical attention, obtain services from a shelter or program, counseling or to plan for their safety.  Beginning in 2017, employers are required to notify new employees of certain rights under this law.  Current employees need only be notified of their rights upon request.  Action: Employers must notify new employees of several rights under the law: (1) that the employer prohibits retaliation against employees who use this leave, (2) that employees can use vacation, sick or any other time off they are already entitled to, and (3) that the right does not extend the amount of time off they are entitled to under the FMLA.  The Labor Commissioner will be creating a form for employers to use for this purpose.  In lieu of the form, handbooks can include the required language.

7.  Single-Occupant Restrooms Must Be Identified as “All-Gender” – By March 1, 2017, all business establishments that have single-user toilet facilities are required to change the sign to identify the restroom as “all-gender” and conform generally with normal signage requirements.

8.  Venue and Choice of Law – Labor Code section 925 now prohibits employers from obligating California-based employees to sign agreements that require lawsuits to be brought outside of California or under other states’ laws, if the employee “primarily” works in California.  This new law expands California’s right to adjudicate disputes between employers and employees.  Previously, out of state employers could insert terms into their employment contracts applying their home state’s law and forums, making it difficult for California employees to sue their employer.  Action: Review your employment contracts for any offending language and amend them to identify California as the choice of venue and law for California employees.

9.  EEOC Defines Rules Regarding National Origin Discrimination – The federal EEOC implemented new guidelines that are similar to California law.  The EEOC prohibits discrimination based on “national origin.”  The guidelines state that the place of origin can be a country, former country, or geographic region closely associated with a particular national origin group. National origin discrimination includes discrimination based on:

  • Ethnicity: A person can not be discriminated against because he or she either belongs, or doesn’t belong, to a particular ethnic group;
  • Physical, linguistic, or cultural traits: Subjecting a person to adverse employment action due to his or her accent, style of dress, or other traits associated with a certain origin may constitute discrimination;
  • Perception: Regardless of a person’s actual origin, if he or she is discriminated against due to the belief that he or she is of that origin;
  • Association: A person’s  association with someone of a particular national origin (for example, his or her spouse or child);
  • Citizenship: Employers may not make hiring decisions based on an applicant’s status as a citizen or permanent resident (other than the fact that the applicant must be legally able to work in the U.S.).

Employers must have a legitimate business reason for making employment decisions based on accents, such as: (1) the ability to communicate in spoken English is required to perform job duties effectively; and (2) the individual’s accent materially interferes with job performance.  There must be a legitimate business reason to make decisions based on fluency, if it is necessary for the effective performance of the position.  Finally, “English-only policies” are only legal if they are required to promote safe and efficient job performance or business operations, and are only enforced for those purposes.  Action: Review handbook language and other management training documents to ensure they are compliant with the law.

10.  Workers’ Compensation Coverage Exclusions Narrow for Business Owners – Previously, officers, directors and working partners were not required to be covered by a company’s Workers’ Compensation (WC) policy unless they opted in for coverage.  Beginning January 1, 2017 (and including in-force policies), officers, directors and partners are required to be covered unless they meet the narrow exception to allow them to opt out. For corporations, only corporate officers and members of the Boards of Directors who own 15% or more of the issued and outstanding stock of a corporation may opt out of WC. General partners of partnerships and managing members of limited liability companies can also opt out of coverage.  This law is intended to prevent employers (usually in high risk industries) from giving employees a small (e.g., 1%) ownership interest to avoid paying Workers’ Compensation insurance premiums. Action: contact your WC insurance carrier to ask for details on the new rules and for an opt in/opt out form.

Change on the Horizon:  Agricultural Workers Right to Overtime Phase In Beginning 2019-AB 1066.  The overtime rules for agricultural employees working for employers with 25 or more employees are changing beginning January 1, 2019.  Agricultural workers who work more than 9.5 hours per day and/or 55 hours per week will be entitled to 1.5 times their regular hourly rate.  The law will continue to roll-out between 2020 and 2025 until the overtime rules are in alignment with those for non-agricultural employees.  Action: No action is required this year.  However, we encourage agricultural employers to review their policies and increase their staffing if necessary to ensure they will be ready when the law goes into effect on January 1, 2019.

Have a great 2017, and please contact Dawn Ross or Samantha Pungprakearti for help with your labor and employment law needs – (707)526-4200; dross@cmprlaw.com; orspungprakearti@cmprlaw.com