Labor and Employment

Effective January 1, 2021, California’s minimum wage rate increased to $14.00 per hour (from $13.00) for employers with 26 or more employees and $13.00 per hour (from $12.00) for employers with 25 or fewer employees. The minimum wage will continue to increase yearly until it reaches $15.00 per hour on January 1, 2022 for employers with 26 or more employees and January 1, 2023 for employers with 25 or fewer employees.

In California, many cities and counties are increasing their minimum wages faster than the state. Click here for a chart of increases set to take place in 2021.

Also note that effective January 1, 2021, the minimum salary threshold for exempt executive, administrative, and professional employees is as follows:

• $58,240 per year (or $1,120 per week) for employers of 26 or more employees
• $54,080 per year (or $1,040 per week) for employers of 25 or fewer employees

Further, in order to maintain their exempt status, commissioned inside salespeople will need to earn more than $21 per hour (for employers of 26 of more employees) or $19.50 per hour (for employers of 25 or fewer employees).

On September 30, 2020 Governor Newsom signed Senate Bill 973 which requires large employers to report certain pay and other data to the Department of Fair Employment and Housing (DFEH) by March 31, 2021 and annually thereafter. On November 2, 2020, the DFEH issued certain FAQs regarding this new obligation and announced that it anticipates rolling out a secure online reporting system in advance of the 2021 filing deadline.

Below are a few of the DFEH’s FAQs.

Why does California require large employers to report pay data to DFEH?

(11/02/2020) In SB 973, the California Legislature required employers of 100 or more employees to report to DFEH pay and hours-worked data by job category and by sex, race, and ethnicity (hereinafter “pay data”). In enacting this legislation, the Legislature found that “[d]espite significant progress made in California in recent years to strengthen California’s equal pay laws, the gender pay gap persists, resulting in billions of dollars in lost wages for women each year in California. Pay discrimination is not just a women’s issue, but also harms families and the state’s economy. In California, in 2016, women working full time, year round made a median 88 cents to every dollar earned by men, and for women of color, that gap is far worse. Although there are legitimate and lawful reasons for paying some employees more than others, pay discrimination continues to exist, is often ‘hidden from sight,’ and can be the result of unconscious biases or historic inequities.”

By creating a system by which large employers report pay data annually to DFEH, the Legislature sought to encourage these employers to assess themselves pay disparities along gendered, racial, and ethnic lines in their workforce and promote voluntary compliance with equal pay and anti-discrimination laws. In addition, SB 973 authorized DFEH to enforce the Equal Pay Act (Labor Code section 1197.5), which prohibits unjustified pay disparities. The Fair Employment and Housing Act (Gov. Code § 12940 et seq.), already enforced by DFEH, prohibits pay discrimination. Employers’ pay data reports will allow DFEH to more efficiently identify wage patterns and allow for effective enforcement of equal pay or anti-discrimination laws, when appropriate. DFEH’s strategic vision is a California free of discrimination.

Will DFEH’s pay data reporting system be similar to the one used by the EEOC to collect EEO-1 Component 2 data?

(11/02/2020) To ease reporting by employers, DFEH is endeavoring to create a system that closely resembles the EEOC’s system to the extent permitted by state statute.

 What is the deadline for employers to submit their pay data report(s) to DFEH?

(11/02/2020) Under Government Code section 12999(a), employers must submit their pay data reports to DFEH on or before March 31, 2021, and then on or before March 31 each year thereafter.

 What are the penalties for employers who fail to file?

(11/02/2020) “If [DFEH] does not receive the required report from an employer, the department may seek an order requiring the employer to comply with these requirements and shall be entitled to recover the costs associated with seeking the order for compliance.” Gov. Code § 12999(h).

Will an employer’s pay data be publicly available?

(11/02/2020) Government Code 12999(i) prohibits DFEH, the Division of Labor Standards Enforcement (DLSE), and their staff from making “public in any manner whatever any individually identifiable information obtained pursuant to their authority under this section prior to the institution of an investigation or enforcement proceeding by [DFEH and/or DLSE] under Section 1197.5 of the Labor Code or Section 12940 involving that information, and only to the extent necessary for purposes of the enforcement proceeding. For the purposes of this section, ‘individually identifiable information’ means data submitted pursuant to this section that is associated with a specific person or business.”

The DFEH advises that further guidance is coming soon in updated FAQs on the following topics:

• What information/content is required in an employer’s report.
• Further information on the definition of “pay.”
• Further information on the definition of “hours worked.”
• Information regarding multi-establishment employers.
• Information on reporting obligations in connection with acquisitions and mergers.

The DFEH advises that it will be regularly updating the FAQs and it invites employers to write to the DFEH at paydatareporting@dfeh.ca.gov to pose additional questions. The DFEH’s FAQs can be found at https://www.dfeh.ca.gov/paydatareporting/.

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The Labor and Employment attorneys at Weintraub Tobin assist employers in all aspects of their employment law compliance, including compliance with California’s Equal Pay Act.  Please feel free to reach out to any of the attorneys if we can be of assistance to you in your employment law compliance.  Stay healthy and stay safe.

Since its implementation on January 1, 2018, The Fair Chance Act has been a source of questions for California employers. Also referred to as “banning the box,” Government Code section 12952 makes it illegal for most employers in California to ask about the criminal record of job applicants before making a conditional job offer. You can refer to our previous blog on the subject here.

The Department of Fair Employment and Housing (“DFEH”) recently amended the regulations implementing the law, with an effective date of October 1, 2020. Among the updates are the following:

• An expanded definition of  an “applicant” to include individuals who begin work before an employer’s review of their criminal history. Specifically, the regulations state that “[a]n employer cannot evade the requirements of [the FEHA] or this regulation by having an individual lose their status as an ‘applicant’ by working before undertaking a post-conditional offer review of the individual’s criminal history.”
• A clarification that the Act must be complied with even when selecting workers supplied by labor contractors and union hiring halls.
• An explanation that employers who are required by law to conduct criminal background checks, do not have a full exemption from the Fair Chance Act. The regulations specify that employers may not utilize records not permitted for disclosure by law, and that such employers must still be able to justify their policies. As the regulations state, “[c]ompliance with federal or state laws or regulations that mandate particular criminal history screening processes, or requiring that an employee or applicant possess or obtain any required occupational licenses constitute rebuttable defenses to an adverse impact claim under the Act.”
• A direction that “[w]hile employers are prohibited from considering referral to or participation in a pretrial or post-trial diversion program, it is permissible to consider these programs as evidence of rehabilitation or mitigating circumstances after a conditional offer has been made if offered by the applicant as evidence of rehabilitation or mitigating circumstances.
• A reminder that in addition to following the Fair Chance Act, employers must also ensure compliance with other local laws and ordinances.

In addition, the DFEH published a FAQ, which describes the law, explains how the law works, addresses what employers are covered by the law, and provides guidance as to when employers may inquire into an applicant’s criminal history and (where necessary), rescind a conditional job offer. That FAQ can be found here.

The FAQ and amended regulations demonstrate that the DFEH takes the Fair Chance Act seriously. Employers should take great care in understanding the procedures set forth in the Act to promote compliance, and also ensure those individuals within their organization that are charged with hiring are properly trained on intricacies of the Act and how to properly implement it.

The California Department of Fair Employment and Housing (“DFEH”) is the state agency charged with enforcing California’s laws against harassment, discrimination, and retaliation in employment, housing, and business establishments throughout the state. It proclaims on its website that it is “the institutional centerpiece of California’s broad anti-discrimination and hate crimes policy.” According to the DFEH, it is the largest state civil rights agency in the country.

Taking its charge seriously, the DFEH has been busy recently implementing new regulations, creating on-line training, and issuing guidance and FAQs in connection with the various laws it enforces.  Below is a summary of some of its most recent activity related to the workplace.

1. Fair Chance Act: Criminal History and Employment FAQs. In September, 2020, the DFEH issued its FAQs regarding the California Fair Chance Act (CA Government Code section 12952) which is the “ban the box” law that went into effect on January 1, 2018.  The FAQs are written so as to respond to questions that would be posed by an applicant for employment who may have a criminal conviction record, and explains the process an employer must follow under the law before denying employment on the basis of a criminal conviction.  While written for applicants, the FAQs provide helpful information for employers.
2. On-Line Sexual Harassment Prevention Training. On August 4, 2020, the DFEH announced that it has finally launched the free on-line anti-harassment training for both supervisors and non-supervisory employees pursuant to the mandates of CA Government Code section 12950.1.  California law requires all employers of 5 or more employees to provide 1 hour of sexual harassment and abusive conduct prevention training to non-supervisory employees, and 2 hours of sexual harassment and abusive conduct prevention training to supervisors and managers once every two years. The law requires the training to include practical examples of harassment based on gender identity, gender expression, and sexual orientation.
3. FAQs Re: Employment and COVID-19. In July, 2020, the DFEH issued its FAQs to provide guidance to employers and employees about how to keep the workplace safe during the COVID-19 pandemic while at the same time upholding civil rights laws.  It reiterates that civil rights laws are still in place during the pandemic, but explains how employers may make various inquiries and/or conduct certain health screenings of employees in order to protect the workplace from the spread of the virus.
4. LGBTQ Fact Sheet. In June, 2020, the DFEH issued its Fact Sheet concerning LGBTQ rights in employment, as well as in housing and business establishments.  The Fact Sheet explains that it is unlawful for employers, landlords, businesses of all kinds, health care providers and insurers, homeless shelters, state funded programs and services, and others to discriminate against anyone or treat them unequally because of their sexual orientation, gender identity, gender expression, or sex.
5. Hearing on Hate Violence. Finally, on September 21, 2020, the DFEH’s Fair Employment and Housing Council held a virtual public hearing about hate violence in California.  The purpose was to discuss certain interventions to reduce violence motivated by bias against someone’s race, national origin, religion, sexual orientation, gender identity, sex, or other personal characteristic.  While the DFEH already has resources to address hate violence, it is likely that further information and resources will be forthcoming given the DFEH’s deeper dive into the subject.

More information on the above recent DFEH resources, as well as others, can be obtained from the DFEH website at: https://www.dfeh.ca.gov/

The Labor and Employment attorneys at Weintraub Tobin have years of experience counseling and defending employers in all areas of employment law, including the civil rights laws enforced by the DFEH.  If we can be of assistance to you in your compliance with the law, and/or defense of a claim, feel free to reach out to us.  Stay health and safe.