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New Year, New Laws: 2018 Changes in Store for California Employers

Dec 13, 2017 9:00:00 AM / by Deborah Hyde

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A new year brings new employment laws and regulations for employers, and 2018 is no exception for California. A variety of measures were passed on both the State and local levels that will take effect on January 1.

STATE LEGISLATION

  • New Parent Leave Act: California’s New Parent Leave Act imposes baby-bonding leave requirements on smaller employers that are similar to those imposed on larger employers under FMLA and CFRA. Under the Act, employers with 20 or more employees in a 75-mile radius must provide 12 weeks of protected baby-bonding leave to eligible employees.
  1. Employers not subject to FMLA/CFRA (those with 20-49 employees) will need to put in place a baby-bonding leave policy that complies with all aspects of the Act, as well as update leave letters. Employers already subject to FMLA/CFRA should amend existing policies to state its compliance with the Act. Additionally, employers subject to FMLA/CFRA that have locations with 20-49 employees will need to provide baby-bonding time where it otherwise is not required under FMLA/CFRA.
  • Ban on Prior Salary Inquiries: Under AB 168, California employers are prohibited from inquiring about an applicant’s prior salary, and cannot rely on prior salary information in deciding on the compensation it will offer. This law takes California’s Fair Pay Act, which disallows prior salary alone to be a justification for pay disparity, one step further.
  1. Applications and all other aspects of the recruiting and hiring process must exclude any inquiries about salary history, though employers may ask about the pay expectations of an applicant. Employers must be prepared to provide a pay scale for a position upon request.
  • “Ban the Box” on Employment Applications: Employers can no longer include criminal history inquiries on applications for employment, nor seek information on criminal history in any other manner, prior to making a conditional offer of employment. Once a conditional offer of employment is made, an employer may conduct a criminal history background check, but certain history, including arrests that did not result in conviction, must be categorically excluded.
  1. Employers should review job applications and to ensure there are no inquiries about criminal history. If the employer chooses to conduct a background check post-conditional offer, offer letters should also be reviewed. Employers must understand the requirements imposed by the law should the employer wish to take adverse action against an applicant based on his/her criminal history.
  • Changes to SDI and PFL Benefits: State Disability Insurance (SDI) and Paid Family Leave (PFL) wage replacement benefits will increase from 55% weekly wage replacement up to 60% for those who earned as much or more than one-third of the State’s average quarterly wage, and up to 70% for those who earned less than one-third of the State’s average quarterly wage. Additionally, the one-week waiting period for PFL will be eliminated.
  1. Employers should update their employee handbooks and other communication materials to reflect these changes. Those that  sponsor short and/or long-term disability plans for employees may wish to also review their benefits.
  • State Minimum Wage Increase: California’s minimum wage will increase from $10.50 per hour to $11.00 per hour. Employers with 25 or fewer employees will see an increase from $10.00 per hour to $10.50 per hour, as small employers are delayed by one year on the State’s gradual increase to $15.00 per hour by year 2022.
  1. The increased minimum wage will impact the minimum salary requirements for exempt employees who generally must be paid a monthly salary of at least two times the State minimum wage. Though not related to the minimum wage change, the compensation criteria for computer professionals will also increase to a monthly salary of at least $7,565.85, or $43.58 per hour.

LOCAL ORDINANCES

  • San Francisco Paid Parental Leave Ordinance: Paid Parental Leave became effective January 1, 2017 for employers with 50 or more employees. On January 1, 2018, the Ordinance takes full effect for employers with as few as 20 employees. Under the Ordinance, employers must provide eligible employees with supplemental compensation such that amounts received under California’s Paid Family Leave benefit and through the employer total 100% of the employee’s gross weekly wage.
  1. Employers newly subject to the Ordinance must ensure the mandated poster is provided to employees and that new policies are implemented – or existing policies amended – to ensure compliance. In addition to the poster,  the City provides some resources to aid employers.
  • San Francisco Lactation in the Workplace Ordinance: Employers with at least one employee in San Francisco must provide employees with break time and a location for lactation. Employers also must implement a policy that details a process by which an employee can request a lactation accommodation. San Francisco’s requirements are stricter than existing federal and State laws.
  1. A lactation accommodation policy must be implemented and distributed to employees. Employers should also ensure that the space provided for lactation meets the Ordinance’s specifications. The City makes available  a sample policy and other resources for compliance.    
  • Minimum Wage Increases by City: A number of cities throughout California will raise minimum wage. For more information about a city not listed, as well as to view minimum wage increases scheduled to take effect later than January 1, consult the city’s official website.
    • Los Altos: from $12 per hour to $13.50 per hour
    • Los Angeles: from $12 per hour to $13.25 per hour
    • Mountain View: from $13 per hour to $15 per hour
    • Palo Alto: from $12 per hour to $13.50 per hour
    • San Jose: from $12 per hour to $13.50 per hour
    • San Mateo: from $12 per hour to $13.50 per hour
    • Santa Clara: from $11.10 per hour to $13 per hour
    • Sunnyvale: from $13 per hour to $15 per hour

Topics: ACA, ACA Compliance, hr compliance

Deborah Hyde

Written by Deborah Hyde

As a member of the Filice Compliance Team, Deborah provides in-depth analysis and guidance on Benefit Laws and Regulations by ensuring clients effectively meet the challenges of the ever-evolving legal landscape. Prior to joining Filice, Deborah served as Associate Counsel for a leading ERISA institutional trustee.

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