2017 LEGISLATIVE ISSUES
FOR CALIFORNIA EMPLOYERS
January 2017
*This presentation is offered for informational purposes only, and the content should not be construed as legal
advice on any matter.
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January 2017
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California minimum wage increases
 SB 3 will increase the minimum wage over the next several
years to $15/hour
– Beginning on January 1, 2017, minimum wage increases
to $10.50/hour
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January 2017
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Equal pay
– AB 1676 amends last year’s Fair Pay Act, Section 1197.5 of the
Labor Code, to prohibit employers from considering prior salary as
the sole justification for any disparity in compensation. Effective
January 1, 2017
– SB 1063 expands the Fair Pay Act to race and ethnicity, and
responds to critics that the pay equity issue is not limited to gender.
Specifically, it prohibits employers from paying employees a wage
less than the wage paid to employees of a different race or ethnicity
for substantially similar work. Effective January 1, 2017
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Wage and hour
 AB 1066 enacts the “Phase-In Overtime for Agricultural Workers Act of 2016,”
which lowers the current 10-hour-day threshold for overtime by half an hour
each year until it reaches the standard eight-hour day/40-hour week by 2022.
Effective January 1, 2019, employers are required to pay overtime for any
hours worked over 9.5 hours per day or 55 hours per workweek
– AB 2899 requires that any employer, before appealing a decision by the
Labor Commissioner (LC) relating to a violation of wage laws, must file a
bond – in favor of the unpaid employee – with the LC that covers the total
amount of unpaid wages assessed under citation, excluding penalties.
Effective January 1, 2017
– AB 2535 employers need not list the number of hours worked on wage
statements for any employee who is exempt from minimum wage and
overtime requirements under the applicable IWC Wage Order or under
statutes specified in Labor Code Section 226(j). Effective January 1, 2017
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Background checks and immigration
– AB 1843 prohibits employers from asking an applicant for employment to
disclose any information regarding juvenile convictions and seeking or
utilizing any information related to juvenile arrests, detentions, or court
dispositions as a factor in employment determination. Some exceptions for
employers at a health facility. Effective January 1, 2017
– SB1001 makes it an unlawful employment practice to request more or
different documents than required under federal law to verify that an
individual is not an unauthorized immigrant, or to refuse to honor documents
tendered that on their face reasonably appear to be genuine, refuse to
honor documents or work authorization based on specific status or term that
accompanies the authorization to work, or to attempt to reinvestigate or reverify an incumbent employee’s authorization to work using an unfair
immigration-related practice. Effective January 1, 2017
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Federal background checks and immigration
– Revised I-9: On Nov. 14, USCIS released a revised version of Form I-9. By
January 22, 2017, employers must use the revised form. Employers should
continue to follow existing storage and retention rules for all of their
previously completed Forms I-9. Among the changes in the new version,
Section 1 asks for “other last names used” rather than “other names used,”
and streamlines certification for certain foreign nationals. Other changes
include:
– The addition of prompts to ensure information is entered correctly
– The ability to enter multiple preparers and translators
– A dedicated area for including additional information rather than having to
add it in the margins
– A supplemental page for the preparer/translator
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Discrimination and harassment
– AB 2337 requires employers with 25 or more employees to give notice to
employees regarding domestic violence protections and right to time off
related thereto
– Employer must inform each new employee – and other employees upon
request – of the rights protecting employees affected by domestic
violence in writing
– Labor Commissioner is charged with developing the form providing notice
by July 1, 2017. Employers are not required to provide notice until
the Labor Commissioner posts the form
(Existing law already requires employers to allow time off to any employee
who is the victim of domestic violence or sexual assault and who needs time
off for a TRO, medical attention, shelter or rape crisis services, counseling,
or safety planning or relocation; new law simply establishes notice
requirement)
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Other new California legislation
 Employment contracts – choice of law and forum
– SB 1241 prohibits an employer from requiring an employee who resides and works in
California, as a condition of employment, to agree to a provision that would either
require the employee to litigate or arbitrate employment disputes (1) outside of
California or (2) under the laws of another state. Effective January 1, 2017
– EXCEPTION: OK for non-CA venue/choice of law if the employee was
represented by a lawyer in negotiating an employment contract
 Single-user restrooms
– AB 1732 requires all single-user toilet facilities in any business establishment, place
of accommodation, or government agency to be identified as all-gender toilet
facilities. The bill also provides that local officials responsible for code enforcement
are to inspect for compliance. Effective March 1, 2017
 Payroll
– AB1847 requires that employers who notify employees of their eligibility for the
federal EIC Tax Credit must also notify these employees that they may be eligible for
the California EIC
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January 2017
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Other new California legislation (cont’d)
 New certification requirements for public contractors
– AB 2844 requires those who bid, propose, or renew a contract of $100,000 or more
with a state agency to certify their compliance with the Unruh Civil Rights Act and the
Fair Employment and Housing Act
 Increase in paid family leave benefits
– AB 908 increases the amount of paid family leave benefits an employee can receive
from 55 percent of earnings to either 60 or 70 percent of earnings, depending on
income. These increases begin on January 1, 2018
 Private retirement savings plans
– AB1234 requires that employers with five or more employees that do not offer
specified retirement plans put a payroll arrangement in place so employees can
contribute a portion of their wages to a retirement savings program in the California
Secure Choice Retirement Savings Program
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New local ordinance: San Jose
 Scheduling
– Measure E: Requires that before additional personnel are hired, existing
employees must be offered additional hours of work if they have the skills
and experience to perform the work
– Applies to employers with more than 36 employees in total throughout
the company, but does not require employees to be given overtime
– Employers are encouraged to train their employees to make them
qualified for additional hours
– Newly proposed AB-357: The California Fair Scheduling Act would require
certain businesses with 10 or more employees to offer additional hours of
work to an existing nonexempt employee who, in the employer’s reasonable
judgment, has the skills and experience to perform the work, before hiring
an additional employee
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January 2017
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High times!
– California voters passed Proposition 64, legalizing recreational use of
marijuana
– Californians who are 21 and older can possess, transport, buy, and use
up to an ounce of marijuana
– Effective immediately
– Does not set a legal limit for marijuana (like 0.08% for blood alcohol level)
– While use is lawful, people still cannot be high at work
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January 2017
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New local ordinance: San Francisco
 Scheduling
– San Francisco formula retail employee rights ordinances: Requires
certain restaurants and retailers to provide employees with work schedules
two weeks in advance, with a penalty of up to four hours of pay for
subsequent changes. Employers also must provide specified amounts for
employees who are on call and offer additional work to certain part-timers
before hiring more staff. Effective March 1, 2016
– Newly proposed AB-357: The California Fair Scheduling Act would require
certain businesses with more than 500 California employees (including
electronic and tech retailers, grocery stores, restaurants, and franchises) to:
– Provide employees with at least 2 weeks’ notice of their work schedules
– Pay penalties for shifts that are changed or canceled within that two
weeks and
– Pay specified amounts to employees who are on call
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New local ordinances: Los Angeles
 Wage and hour
– Los angels city minimum wage and sick leave ordinance: The new law,
which went into effect on July 1, 2016, requires that employers with 26 or
more employees provide employees with 48 hours of paid sick leave per
year, which is twice the amount required by California state law. The
ordinance also increases the minimum wage according to the following rate:
Effective
date
Employers with 26
or more employees
Employers with 25 or fewer employees or
nonprofit corporations with 26 or more
employees with approval to pay a deferred
rate
7/1/2016
$10.50
Deferred
7/1/2017
$12.00
$10.50
7/1/2018
$13.25
$12.00
7/1/2019
$14.25
$13.25
7/1/2020
$15.00
$14.25
7/1/2021
$15.00
$15.00
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New local ordinance: San Diego
 Wage and hour
– San Diego minimum wage and earned sick leave: San Diego’s new
minimum wage ordinance implemented the following rules:
– Employees working in the City of San Diego must now be paid a
minimum wage of at least $10.50 per hour
– The minimum wage increases to $11.50 per hour on January 1, 2017
– Beginning January 1, 2019, the minimum wage will be tied to the
Consumer Price Index and adjusted as necessary based on the cost of
living
– Employers must provide employees with 1 hour of earned sick leave for
every 30 hours worked
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New legislation: Portland, Oregon
 CEO pay
– Tax surcharge on CEO pay: Effective January 1, 2017, companies with
CEOs whose compensation is more than 100 times the median pay of all of
their workers must pay an extra 10% surcharge on top of Portland’s existing
2.2% business income tax. Companies with CEOs who make 250 times the
median pay will pay an additional 25%
– This applies to every organization doing business in Portland – not just
those who are based within the city
– The Portland City Council estimates this will generate an estimated $2.5
million to $3.5 million per year
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January 2017
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DOL overtime rules on hold
 On November 22, 2016, a Texas federal district judge issued a preliminary
injunction on the DOL’s final rule
 Technically, this injunction excuses employers everywhere – for now – from
complying with the new rule that was set to become effective on December 1
 If you have already told employees of their new status, it may not make
sense to reverse field on short notice
– Employees who expected salary increases or OT pay may react
negatively, contact the DOL or an attorney
– Morale issues
– Confusion with employees, administration, payroll
 Uncertainty over whether the preliminary injunction will survive an appeal by
the DOL to the US Court of Appeals for the Fifth Circuit
 Note that briefing on the appeal is expedited, to be concluded in end of
January (i.e., after the new Trump Administration takes over)
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