New California Employment Laws

California State Capitol

It has been a busy few weeks on the legislative front in California. After a closing flurry of activity from the legislature, Governor Brown this week finished signing and vetoing the various bills that made their way to his desk. Here are some new laws that will impact employers, beginning January 1, 2012:

SB 299: This bill prohibits an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes up to four months of leave because of pregnancy disability. This applies to all employers with five or more employees.

AB 22: This bill prohibits an employer or prospective employer, with the exception of certain financial institutions, from obtaining a consumer credit report, as defined, for employment purposes unless the position of the person for whom the report is sought is (1) a position in the state Department of Justice, (2) a managerial position, as defined, (3) that of a sworn peace officer or other law enforcement position, (4) a position for which the information contained in the report is required by law to be disclosed or obtained, (5) a position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, (6) a position in which the person is or would be a named signatory on the employer’s bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer’s behalf, (7) a position that involves access to confidential or proprietary information, as specified, or (8) a position that involves regular access to $10,000 or more of cash, as specified.

AB 592: This bill would makes it an unlawful employment practice for an employer to interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right to leave under the California Family Rights Act or for pregnancy disability. The statute states that it is declaratory of existing law.

SB 459: This bill adds section 226.8 to the Labor Code. The new section makes it unlawful (1) to willfully misclassify an individual as an independent contractor, and (2) to charge misclassified independent contractors fees or make deductions from their compensation for items such as goods, materials, maintenance, licenses, or repairs. An employer who willfully misclassifies an independent contractor may be subject to a penalty of $5,000 to $15,000 for each violation, and, if the employer is found to have engaged in a "pattern and practice" of misclassifying employees as independent contractors, $10,000 to $25,000 for each violation.

AB 1396: This bill requires any employer who enters into a contract of employment involving commissions as a method of payment with an employee for services to be rendered within the state to put the contract in writing and to set forth the method by which the commissions are required to be computed and paid. The enactment was prompted by a federal court decision that invalidated Labor Code section 2751 because it only applied to out-of-state companies. Lett v. Paymentech, Inc., 81 F.Supp.2d 992  (N.D. Cal. 1999).

SB 272: Existing law requires an employer to grant a leave of absence to an employee who is an organ donor or a bone marrow donor. The leave of absence to an organ donor is up to 30 days in a one-year period. The leave of absence for a bone marrow donor is up to 5 days in a one-year period. The leave of absence for either donor is not a break in his or her continuous service for the purpose of his or her right to salary adjustments, sick leave, vacation, annual leave, or seniority. As a condition of an employee’s initial receipt of the leave of absence, an employer may require the employee to take a specified number of days of earned but unused sick or vacation leave, unless that would violate provisions of an applicable collective bargaining agreement. This bill would provide that the days of leave are business days rather than calendar days, and that the one-year period is measured from the date the employee’s leave begins and consists of 12 consecutive months. This bill would also provide that the leave of absence is not a break in the employee’s continuous service for the purpose of his or her right to paid time off. This bill would further provide that the employer may condition the initial receipt of leave upon the employee’s use of a specified number of earned but unused days for paid time off.