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California Fair Pay Act Confusion – Understanding California Labor Code Section 1197.5

The following discussion concerns the California Fair Pay Act, and how to apply it. If you are unfamiliar with the Act, you may wish to begin by reading this blog.

I get calls from employers asking: “When I group my employees by substantial similarity of work, how do I know that I am doing it correctly?” These employers fear that someone – a Court, a plaintiff, or an employee – will come along and challenge the employer’s determination of who among its employees are engaged in “substantially similar” work.

The statute affirmatively requires employers to engage in that grouping. Unlike earlier equal pay act legislation, California’s Fair Pay Act puts the burden of proving compliance with the statute on the employer. Many employers are understandably concerned that their categorization of employees into groups of “substantial similarity” will be subject to criticism and attack.

The statutory language itself provides some relief to this anxiety. The section says:

(a) An employer shall not pay any of its employees at wage rates less than the rates paid to employees of the opposite sex for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, except where …”

Although a lot can be said about what follows section (a), the first step of the analysis required by the statute requires grouping of workers into groups of substantially similar work. The statute requires the employer to view the work performed by its employees as “a composite of skill, effort and responsibility, and performed under similar working conditions ….” The statute stays, “when viewed as a composite…”. It doesn’t say “a composite as defined by law” or “a composite as approved by the Court,” or “a composite as determined by the administrator” …. Instead, it simply says that the employer is required to view the substantially similar work of its workers as “a” composite of skill, effort and responsibility. And while this may seem like a lot to place on a single article, “a,” the use of the article can be fairly read as expressing the legislature’s intent. The legislature is requiring employers to view the workforce or the positions performed by its workforce as a composite of the listed attributes.

Suppose we can read into that phrase the duty to make the composite reasonable and based upon an honest and fair assessment of the skill, effort and responsibility required to perform the work. The logical conclusion from that language, is that if the employer does the analysis required by the statute reasonably, that composite should be viewed by a court as dispositive, or at least as persuasive. Although there are no published cases under this statute as of this writing, this statutory language would support, in my view, a forceful argument that the employer gets to define a reasonable composite of skill, effort and responsibility and, that composite must be viewed favorably by courts as determinative of “substantial similarity “ of the work involved.

Neutral Services: We Help You Connect the Pieces

The Labor & Employment attorneys at Weintraub Tobin can help you avoid expensive and protracted litigation. We specialize in:

  • Training supervisors on various workplace issues, including preventing harassment, discrimination, and retaliation; workplace health and safety; and managing leave laws.
  • Conducting independent investigations into complaints of misconduct in the workplace.
  • Mediating employment disputes both pre and post litigation

For more information please contact:

Lizbeth “Beth” West 916.558.6082 or lwest@weintraub.com

Vida L. Thomas 916.558.6058 or vthomas@weintraub.com

Meagan D. Bainbridge 916.558.6038 or mbainbridge@weintraub.com

DLSE Issues New Guidance on Rest Breaks – Is Your Handbook Up to Date?

The Division of Labor Standards Enforcement (“DLSE”) recently issued updated guidance regarding rest breaks that reverses its previous position, which permitted employers to require that employees stay on work premises during their rest periods. In this new guidance, the DLSE states that employers “cannot impose any restraints not inherent in the rest period requirement itself,” including forbidding employees to leave the premises. This guidance follows the California Supreme Court’s determination that rest breaks, like meal breaks, must be “duty free.” In Augustus v. ABM Security Services, Inc. (2016) 5 Cal.5th 257, the California Supreme Court determined that a company policy regarding security guards to keep their radios or pagers on during their rest breaks, and to respond if needed, violated the California Labor Code and Wage Orders. The DLSE has expanded this ruling to require that employers permit employees to leave the work premises during their rest break, while noting that “[a]s a practical matter … the employee can only travel five minutes from a work post before heading back to return in time.”

California employers should review their employment policies to ensure compliance with this updated guidance. Weintraub’s Labor & Employment attorneys have extensive experience counseling and auditing employee handbooks. Please contact any member of our team for assistance in updating your policies.

Visit our Labor & Employment Blog here: https://www.thelelawblog.com/2017/12/articles/labor-law/dlse-issues-new-guidance-on-rest-breaks-is-your-handbook-up-to-date/.

New Transgender Rights Poster Required for California Workplaces

By Michelle Covington

On October 15, 2017, California’s Governor Jerry Brown signed SB 396 into law, requiring new training and posters for California employers.  Currently, California law requires employers with 50 or more employees to provide at least 2 hours of sexual harassment training to supervisors every two years.  This new bill requires those employers to also include training on harassment based on gender identity, gender expression, and sexual orientation.  Further, employers will be required to display a poster regarding transgender rights.  The poster can be obtained from the Department of Fair Employment and Housing or by clicking here.   The bill is set to go into effect on January 1, 2018.  Our Labor and Employment attorneys are available to ensure that your training materials and posters comply with these new requirements.

California Governor Signs “New Parent Leave Act”

By Michelle Covington

On October 12, 2017, California Governor Jerry Brown signed Senate Bill 63 (“the New Parent Leave Act”).  Under the new law, employers may not refuse to allow certain employees to take up to 12 weeks of parental leave to bond with a new child.  When the leave is taken, the employer must guarantee the same or comparable position upon the employee’s return.

Background

Existing law prohibits an employer from refusing to allow a female employee disabled by pregnancy, childbirth, or a related medication condition from taking leave for a reasonable time (up to 4 months) before returning to work.  Current law also prohibits employers from refusing to maintain heath care coverage for an employee who takes that leave.

Summary of New Law

The “New Parent Leave Act” prohibits an employer from refusing to grant employees up to 12 weeks of parental leave to bond with a new child.  Employees are eligible if they have worked for their employer more than 12 months and have at least 1,250 hours of service in that 12 month period.  Further, the law only applies to employers that have at least 20 employees within 75 miles.  The employer is required to maintain health coverage under a group health plan during the employee’s leave.  The law specifically applies to employees who are not already covered by the federal Family and Medical Leave Act (FMLA).  Lastly, employers are required to guarantee employment for that employee in the same or comparable position at the end of their leave.

California Employers Should

Determine whether they are covered by the new law and which employees are eligible for this leave
Train all managers, supervisors, and human resources to ensure they are aware of the new provisions for parental leave
Our Labor & Employment attorneys have extensive experience counseling and defending employers in all areas of employment law and are happy to assist employers in training, handbook revisions, and further compliance with this new law.  Please feel free to contact any of our Labor & Employment attorneys.

State-Wide BAN THE BOX Law No More Criminal Conviction Questions on Employment Applications

On October 14, 2017, Governor Brown signed Assembly Bill 1008 (the “Fair Chance Act”).  The new law puts in place some protections for those individuals with criminal backgrounds seeking employment.  The new law will be contained in Section 12952 of the California Government Code.

Background.

Existing law prohibits an employer, whether a public agency or private individual or corporation, from asking an applicant for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning an arrest or detention that did not result in a conviction, or information concerning a referral or participation in, any pretrial or post-trial diversion program, except in limited circumstances.

Existing law also prohibits a state or local agency from asking an applicant for employment to disclose information regarding a criminal conviction, except as specified, until the agency has determined the applicant meets the minimum employment qualifications for the position.

Summary of New Law.

The Fair Chance Act repeals the prohibition on a state or local agency from asking an applicant for employment to disclose information regarding a criminal conviction, as described above. Instead, the law now provides that it is an unlawful employment practice under California’s Government Code (in the “Fair Employment and Housing Act”) for an employer with 5 or more employees to do the following:

  • Include on any application for employment any question that seeks the disclosure of an applicant’s conviction history.
  • Inquire into or consider the conviction history of an applicant until that applicant has received a conditional offer of employment.
  • Consider, distribute, or disseminate any of the below information while conducting a conviction history background check in connection with an employment application:
    • Certain arrests not followed by a conviction;
    • Referrals to or participation in a pretrial or post trial diversion program; and
    • Convictions that have been sealed, dismissed, expunged, or statutorily eradicated.

Further, the new law requires that an employer who intends to deny an applicant a position of employment solely or in part because of the applicant’s conviction history to do the following:

  • Make an individualized assessment of whether the conviction history has a direct and adverse relationship with the specific duties of the job—considering the nature and gravity of the offense, the time passed since the offense and completion of the sentence, and the nature of the job held or sought.
  • Notify the applicant in writing of a preliminary decision to deny employment based on that individualized assessment, including disqualifying convictions forming the basis for rescission of the employment offer, a copy of the applicant’s conviction history report, and explanation of the applicant’s right to respond to the preliminary decision before it is final.
  • Allow the applicant five business days to respond to the notice. If within five business days of the notice, the applicant notifies the employer in writing that the applicant disputes the accuracy of the conviction history report that was the basis for the preliminary decision to rescind the offer and that the applicant is taking specific steps to obtain evidence supporting that assertion, then the applicant shall have an additional five business days to respond to the notice.

Ultimately, if an employer makes a final decision to deny an application solely or in part because of the applicant’s conviction history, the employer must notify the applicant in writing of all the following:

  • The final denial or disqualification. The employer may, but is not required to, justify or explain the employer’s reasoning for making the final denial or disqualification.
  • Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration.
  • The right to file a complaint with the California Department of Fair Employment and Housing (DFEH).

The Fair Chance Act does not apply in any of the following circumstances:

  • To a position for which a state or local agency is otherwise required by law to conduct a conviction history background check.
  • To a position with a criminal justice agency, as defined in Section 13101 of the Penal Code.
  • To a position as a Farm Labor Contractor, as described in Section 1685 of the Labor Code.
  • To a position where an employer or agent thereof is required by any state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.

California Employers Should do the Following:

  • Review and update all employment application and hiring materials to ensure there are no questions requiring an applicant to disclose criminal conviction history.
  • Train all managers, supervisors, human resources, and other individuals involved in the recruitment and hiring process to ensure they are aware of the requirements under the new law.
  • Take other reasonable steps (e.g. periodic audits of recruitment and hiring practices) to ensure that they are in compliance with the law.

The Labor & Employment attorneys at Weintraub Tobin have extensive experience counseling and defending employers in all areas of employment law and are happy to assist employers in auditing their recruitment and hiring practices to ensure compliance with California law.  Please feel free to contact partner, Beth West, or any of the other Labor & Employment attorneys.

No More Questions About, Or Use Of, Prior Salary Information In Employment

On October 12, 2017, Governor Brown signed Assembly Bill 168.  Consistent with some other state laws and local ordinances passed by certain municipalities like San Francisco, the new law prohibits the inquiry and use of prior salary information except in limited situations.  The new law will be contained in Labor Code section 432.3 and becomes effective January 1, 2018.The new law:

  • Prohibits an employer from relying on the salary history information of an applicant for employment as a factor in determining whether to offer an applicant employment or what salary to offer an applicant.
  • Prohibits an employer from seeking salary history information about an applicant for employment.
  • Requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant for employment.

The new law does not prohibit:

  • An applicant from voluntarily (without prompting) disclosing salary history information.
  • An employer from considering or relying on voluntarily disclosed salary history information in determining salary, as specified.

The law applies to all employers, including state and local government employers and the Legislature.  However, it does not apply to salary history information disclosable to the public pursuant to federal or state law.

California employers should do the following before the January 1, 2018 effective date:

  • Review and update all employment application and hiring materials to ensure there are no questions requiring an applicant to disclose prior salary information.
  • Train all managers, supervisors, human resources, and other individuals involved in the recruitment and hiring process to ensure they are aware of the requirements under the new law.
  • Take other reasonable steps (e.g. periodic audits of hiring and payroll practices) to ensure that they are in compliance with this law and the California Equal Pay Act which requires equal pay for substantially similar work performed by employees of different genders, races, or ethnicities.

The Labor & Employment attorneys at Weintraub Tobin have extensive experience counseling and defending employers in all areas of employment law and are happy to assist employers in auditing their hiring and payroll practices to ensure compliance with California law.  Please feel free to contact partner, Beth West, or any of the other Labor & Employment attorneys.

Obama’s Overtime Rule Struck Down By Court

By Michelle Covington

A Texas federal court struck down a rule that would have expanded those eligible for overtime pay.  The Department of Labor’s rule would have required overtime pay to most salaried employees who earn less than $47,476 annually.  This would have been a dramatic increase from the current salary level of $23,660.  The rule was expected to have an extensive effect if implemented, to the tune of more than 4 million workers.  The same court had blocked the rule from being enforced in November 2016, but had not yet determined whether the rule was valid.  Over 55 business groups challenged the implementation of the rule, and were rewarded in the court’s August 31st ruling finding that the rule exceeded the Department of Labor’s authority.