NEW CALIFORNIA EMPLOYMENT LAW LEGISLATION

In September 2002, Governor Davis signed a number of important employment law bills which became effective on January 1, 2003. We present a brief summary of the most important pieces of California employment law legislation that were passed during the 2002 legislative session.

SB1661 - Paid Family Leave
AB 2957 - California WARN Act
AB 1599 - Age Discrimination
SB 1471 Sick Leave
AB 2509 - Living Wage Standards
AB 1068/2868 - Background Checks

SB 1661 – Paid Family Leave

SB 1661 amends the California Unemployment Insurance Code and makes California the first state in the nation to enact a paid family leave program. The bill has no small employer exception and provides that all private sector employees may take up to six weeks of leave per year to care for a sick child, spouse, parent, or domestic partner that has a serious health condition. In addition, the same leave is available to care for a newborn or newly adopted child. The paid leave will be funded through the California State Disability Insurance Fund (SDI). The bill requires additional employee contributions to the fund. Any leave taken under this program would run concurrent with leave under the Family Medical Leave Act or California Family Rights Act. However, even employees not eligible for FMLA or CFRA leave would be eligible for this leave.

Some questions about this bill still remain (e.g.. What reinstatement rights would an employee not eligible for FMLA or CFRA leave have after taking leave under this bill?). The implementation period for this bill is delayed and no employee may take leave under this program until July 2004. Between now and July, many of the outstanding questions about how this bill will be implemented should be answered.

AB 2957 – California WARN Act

In 1988, Congress passed the federal Worker Adjustment and Retraining Notification Act (WARN) which required employers employing one hundred (100) or more full-time employees to provide sixty (60) days advance notice before implementing any mass layoffs or plant/facilities closings. Our state government apparently did not feel that the federal WARN Act was sufficient and enacted its own WARN Act that will go into effect January 1, 2003. This act applies to employers employing 75 or more employees (full-time or part-time) and expands the definition of “mass layoff” and “plant closing.” Failure to comply with the California WARN Act can subject an employer to penalties that include back pay, benefits, penalties, attorneys’ fees and court costs. If you are planning a layoff, relocation or facility closing, you will want to seek legal advice in advance to avoid any costly violations of this new statute.

AB 1599 – Age Discrimination Expanded

Early this year, the California Supreme Court ruled that an employer was permitted to deny an older worker the chance to participate in a company-sponsored tuition reimbursement plan on the basis of age because the Fair Employment and Housing Act does not prohibit age discrimination based upon “compensation, terms, conditions or privileges of employment,” but instead, only prohibits discrimination based upon age (over 40) for decisions related to discharge, dismissal, reduction in pay, suspension or demotion. Edsberg v. Union Oil Company.

This bill overturns the California Supreme Court decision and expands the age discrimination provisions of FEHA to prohibit discrimination against individuals over the age of 40 in “compensation, terms, conditions, or privileges of employment.” Thus, employers in California can no longer discriminate in terms of compensation, benefits, and privileges of employment on the basis of age without violating state law.

SB 1471 – No Discipline for Utilizing Sick Leave

California continues to place increased regulation on employee benefits. This bill now makes it illegal for any employer to discipline an employee for utilizing benefits under a bona fide sick leave policy. Under this bill, California employers are prohibited from disciplining, discharging or otherwise taking adverse action against any employee if part of the adverse action occurred as a result of the employee utilizing sick leave benefits. This new law effectively prevents employers from implementing no fault attendance policies (i.e. policies that call for discipline for a certain number of absences regardless of the cause of the absence) and will make it more difficult for employers to manage those employees who are chronically sick and absent, except in those cases where the number of actual absences exceed the number of allotted absences provided by the bona fide sick leave policy.

AB 2509 – Living Wage Standards

This bill allows local agencies (i.e. counties, cities) to impose labor standards that are tougher than those set forth by state law and provides a license for municipalities, counties, etc. to begin regulation of labor standards within their borders. For example, the city of Santa Monica has been attempting to adopt a living wage of $12.25 per hour for certain employees working within certain areas of the city. This statute provides that such an ordinance would be enforceable even though the state minimum wage is $6.75 an hour.

AB 1068/AB 2868 – Background Checks

These bills amend the Investigative Consumer Reporting Agencies Act which creates certain requirements for employers that conduct background checks, reference checks or certain types of investigations on employees and applicants. These bills provide that in most cases an employer conducting reference checks and background checks without the help of an outside agency need not comply with the notice and other requirements of the ICRAA. In addition, this law makes it clear that an employer conducting an internal investigation of misconduct without the use of an outside investigator also does not need to comply with the ICRAA.

Although these bills relieve employers from the provisions of the ICRAA in certain circumstances, the federal and state laws concerning background checks, reference checks and investigations conducted by outside agencies are very confusing. Any employer that engages in these types of activities should review their procedures with competent counsel to make sure they are in full compliance with all applicable laws.



This article was prepared by Mark S. Spring an attorney with the California law firm of Carlton, DiSante & Freudenberger LLP. Carlton DiSante represents California employers in all areas of labor and employment law. Their offices are located in Sacramento, San Francisco, Los Angeles, Irvine and San Diego. For more information, you can contact Mr. Spring at mspring@cdflaborlaw.com or contact any attorney at the firm through their website: www.cdflaborlaw.com.