New Anti-Discrimination Laws2019-07-16T04:41:36-07:00

A Guide to California’s Latest #Metoo Laws for Employers

California recently enacted a barrage of new anti-discrimination laws that will take effect at various times between 2019 and 2021. Employers ranging from 10-employee shops to large, publicly-traded corporations, should take notice, as these laws affect nearly every business.

California recently enacted a barrage of new anti-discrimination laws that will take effect at various times between 2019 and 2021.  Employers ranging from 10-employee shops to large, publicly-traded corporations, should take notice, as these laws affect nearly every business.

Talking to Job Applicants About Pay

In January 2018, AB 168 took effect and forbade employers from asking job applicants their past salaries or wages.  It also required employers to provide pay scales “upon request” to applicants.  The ostensible goal of this law, codified as Labor Code section 432.3, was intended to halt gender-based pay disparities that arise when employers base new applicants’ pay on their prior pay. However, it failed to define key terms and contained several ambiguities.

AB 2282, effective as of January 1, 2019, clarifies at least some of the questions the previous law raised. What you need to know image

One of the most significant criticisms of the previous version of the law was that it made no distinction between brand-new applicants and current-employee applicants. This left many employers scratching their collective heads. Did they have to somehow “forget” an internal candidate’s current salary, or temporarily delete it from their system? Fortunately, now, AB 2282 has excluded current employees from the definition of “applicant.”  Cal. Labor Code section 432.3(k). Likewise, the California Equal Pay Act (Labor Code section 1197.5) now explicitly allows employers to consider a current employee’s wage or salary with the company in deciding how much to pay them for a new internal position.

Another source of confusion with the original law was that it required employers to disclose their “pay scale” to applicants “upon reasonable request.”  Yet the law failed to define “pay scale,” leaving many employers frustrated. Did they have to list one wage or one salary for each position? Or must grocers and law firms alike list a single wage or salary number, or create a chart with one number for each year of experience? A “reasonable request” was likewise ambiguous. Who could request this “pay scale”? Any member of the public who wanted to apply for the job? Anyone who submitted a resume or online application?

With the recent amendment, “pay scale” can mean a range – either for salary or for an hourly wage. And “reasonable requests” may be made only after an applicant (again, an external applicant) has completed an initial interview. Cal. Labor Code section 432.3(c).

Also, importantly, AB 2282 expressly allows employers to ask an applicant for their “salary expectations.”  Cal. Labor Code section 432.3(f).

Forbidden Confidentiality, Non-Disparagement, and Waiver Agreements

As of January 1, 2019, new Civil Procedure Code section 1001 prohibits employers from including, in settlements of sexual harassment and discrimination cases, a requirement that the employee keep the facts confidential. Specifically, the law prohibits “a provision within a settlement agreement that prevents the disclosure of factual information related to a claim filed in a civil action or a complaint filed in an administrative action,” regarding: (1) sexual assault, (2) sexual harassment, or (3) harassment or workplace discrimination based on sex or failure to prevent such discrimination.  Cal. Civ. Proc. Code section 1001(a)(1)-(3).  Settlements may still forbid the employee from disclosing the amount paid, and may forbid the employer from disclosing the plaintiff-employee’s name, if he or she chooses to remain anonymous. Cal. Civ. Proc. Code section 1001(c), (e).

However, a different law allows settlements of other (non-sexual) discrimination cases to include confidentiality provisions. SB 1300 prevents employers from requiring employees to sign “non-disparagement” agreements that prevent disclosure of any harassment or discrimination (e.g., on the basis of race, gender, age) as a condition of employment or of raises or bonuses. Yet this law specifically allows settlements of discrimination claims to include such non-disparagement clauses.  SB 1300 (codified in Cal. Gov. Code sections 12923, 12950.2, 12964.5, 12940, 12965).)

SB 1300 also bars employers from requiring employees to waive their right to make claims of discrimination in court or before an administrative agency. Again, this law includes discrimination and harassment based on any recognized protected class, including race, gender, age, and disability.

Small Employers’ Harassment Training Requirements

In previous years, only companies with 50 or more employees were required to provide harassment training.  Now, however, employers with only 5 or more employees must comply, providing 2 hours’ training to supervisors and 1 hour of training to all other employees within the first 6 months of their hire.  (See SB 1343 (codified in Cal. Gov. Code sections 12950, 12950.1).)  This initial round of training must be complete by January 1, 2020, and must be repeated every 2 years.

If you work for a small company and have never been subject to these requirements before, the training must:

[I]nclude information and practical guidance regarding the federal and state statutory provisions concerning the prohibition against and the prevention and correction of sexual harassment and the remedies available to victims of sexual harassment in employment. The training and education shall also include practical examples aimed at instructing supervisors in the prevention of harassment, discrimination, and retaliation….

Cal. Gov. Code section 12950.1(a).  It must also include training on prevention of “abusive conduct,” i.e., bullying, and on harassment due to sexual orientation or gender identity. Section 12950.1(b)-(c).

If your company hires temporary or seasonal employees, they must also receive training within their first 30 days or 100 hours of work.  Migrant agricultural workers must likewise be trained. Section 12950.1(h).

If you have any questions about your company’s legal requirements for harassment training, or regarding your compliance with any of these other new laws, our experienced employment attorneys are available to assist.

Boards of Directors: Quotas for Women

Perhaps the most publicized women’s rights law for 2019 is SB 826, which gives publicly-traded companies until December 31, 2019 to add at least one woman to their boards of directors.  Cal. Corp. Code section 301.3.  The requirements increase based upon the total number of board members by a second deadline of December 31, 2021. The law is the first of its kind in the country, and while some companies have applauded the measure as it tracks with their own diversity efforts, others oppose it as a needless imposition of quotas on companies who should be free to select whichever directors they choose.

This controversial law applies not only to companies incorporated in California, but to any company (regardless of where it is incorporated) with its principal executive office in California.  Section 301.3(a). That means that a company incorporated in Delaware, under Delaware’s laws, must comprise its board in compliance with California’s laws.  Legal challenges are expected from businesses incorporated in other states – or from the states themselves – but no courts have yet opined on the legality or constitutionality of SB 826.

Companies have also pointed out a major hurdle to compliance with these quotas. Although Section 301.3(a) purports to allow corporations to add more directors to comply with the Section, that statement does not necessarily give companies the ability to do so.  Articles of Incorporation typically set the number of directors a company may have. And the ease (or lack thereof) of amending Articles to increase the number of board members varies by state.  Even in California, the shareholders have a right to approve certain changes in board composition.

If your business faces unexpected challenges with this, and the other new discrimination-related laws taking effect this year, our firm’s expert employment lawyers can work with you to ensure you are in compliance.

Regardless of whether you are just starting a brand new company, run a ‘mom & pop’ business, or you already have a large established corporate enterprise with hundreds of locations across California, we are able to grow with you and meet your legal needs.

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