New Employment Laws for 2012

Employment-Related Credit Checks Restricted. Employers often obtain consumer reports on job applicants that include an individual’s employment history, criminal records and credit records. Beginning January 1, 2012, under § 1785.20.5 of the California Civil Code and § 1024.5 of the Labor Code it will be unlawful for an employment-related consumer report to include an individual’s credit history, credit score and credit record unless position of the person for whom the report is sought is: (1) a management position in which the incumbent is classified as an executive under California wage and hour law; (2) a position that involves regular access to a person’s bank or credit card account information, Social Security number and date of birth (other than for routine solicitation and processing of credit card applications in a retail establishment); (3) position for which the person is, or would be, named as a signatory on the employer’s bank or credit card account or is authorized to transfer money or enter into financial contracts on behalf of the employer; (4) a position that involves access to the employer’s confidential proprietary information and trade secrets; (5) a position that involves regular access to cash of $10,000 or more during the workday; or (6) a position for which an individual’s credit-related information is required by law to be disclosed or obtained.  Violations may result in imposition of civil penalties under the Labor Code as well as liability for actual and punitive damages, civil penalties and injunctive relief under the Credit reporting Agencies Act.

Discrimination Based On Gender Identity and Expression Prohibited. Beginning on January 1, 2012, amendments to the California Fair Employment and Housing Act, Government Code §§ 12945, et seq., will make it unlawful to discriminate against or harass an employee or job applicant based on gender identity or gender expression.  “Gender expression” is broadly defined as a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.”   In addition, an existing requirement that employers allow employees to dress consistent with their gender identity will be expanded so that employers will also be required to allow employees to dress consistent with their gender expression.

Discrimination Based on Genetic Information Prohibited.  The federal Genetic Information Nondiscrimination Act of 2008 prohibits the improper use of genetic information for employment and health insurance purposes.  Beginning on January 1, 2012, amendments to the California Fair Employment and Housing Act will also prohibit employers from discriminating against applicants and employees based on genetic information.  As defined in Government Code § 12926, genetic information is defined as genetic test results of an individual or his or her family, the “manifestation of a disease or disorder” in the individual’s family members or the receipt of “genetic services” by an individual or his or her family members.

Leave for Organ and Bone Marrow Donors Expanded.  California Labor Code § 1510 requires all employers to provide thirty calendar days of paid leave per year to employees who donate organs and five calendar days of paid leave annually to those who donate bone marrow. Under amendments to Labor Code § 1510 effective as of January 1, 2012, employers will be required to provide thirty business days of paid leave per year to organ donors and five business days of annual paid leave to employees who donate bone marrow.   The one-year period must also now be measured from the date the employee’s leave begins and not on the calendar year.

Pregnant Employees Given Additional Protection.  Under current California law, all employers must provide up to four months of unpaid leave if an employee is disabled due to pregnancy, childbirth or a pregnancy-related medical condition.  Employers covered by the federal Family and Medical Leave Act (FMLA) also must generally continue a qualified employee’s group medical insurance and pay the employer portion of the premium during a leave of absence due to pregnancy.  Beginning on January 1, 2012, amendments to the California Fair Employment and Housing Act, Government Code § 12945, will require all California employers to keep a pregnant employee’s group medical coverage in effect during pregnancy leave and pay the employer portion of the premium even if the FMLA is inapplicable.  Employers will have the right to recoup premium payments only if a pregnant employee fails to return for work at the end of pregnancy leave and leave afforded under the California Family Rights Act and the failure was not due to a pregnancy-related condition or other circumstances beyond the employee’s control.

State Contractor Benefit Discrimination Proscribed.  As of January 1, 2012, amendments to § 10295.3 of the Public Contract Code provide, with limited exceptions, that California state agencies cannot enter into contracts worth $100,000 or more with businesses that discriminate in the provision of benefits against employees with same sex spouses or domestic partners. Covered state contractors are also barred from discriminating in the provision of benefits against spouses and domestic partners of employees in same sex relationships.

Farm Labor Contractors Required to Disclose Client Identities. Under Labor
Code § 226, employers are required to provide employees withitemized wage statements each pay period.              Beginning on January 1, 2012, amendments to Labor Code § 226 will require Employers who are farm labor contractors to show the name and address of the legal entity that secured the contractor’s services on each itemized wage statement the contractor issues to its employees.  Employees who are injured by an employer’s “knowing and intentional” failure to comply with this requirement will be entitled to recover the greater of their actual damages or $50 for the initial pay period in which a violation occurs and the greater of actual damages or $100 for subsequent pay periods in which violations occur up to an aggregate maximum of $4000.  Plus, aggrieved employees are entitled to an award of costs and attorney’s fees in an action for violation of the requirements imposed by Labor Code § 226.

Labor Commissioner Authorized to Award Liquidated Damages.  Under existing law, in addition to awarding other relief, courts finding minimum wage violations may also award liquidated damages equal to the amount of wages owed plus statutory interest.  Amendments to California Labor Code §§ 98 and 1194.2, effective January 1, 2012, extend this authority to the Labor Commissioner.   The Labor Commissioner will have the same authority as courts to reduce the amount of liquidated damages awarded upon finding the employer had reasonable grounds for believing its conduct was lawful.

Penalties for Misclassifying Persons as Independent Contractors Enacted.   Beginning on January 1, 2012, newly added Labor Code §§ 226.8 and 2753 will severely penalize those who willfully misclassify individuals as independent contractors and anyone (other than legal counsel) who advises an employer to willfully misclassify someone.  Employers will also be barred from charging willfully misclassified persons (whether as fees or deductions from compensation) for goods, materials, space rental, services, licenses, repairs, equipment maintenance or fines if the fees or deductions would have been prohibited by law had the individual been classified as an employee.  Civil penalties of between $5,000 and $15,000 will be assessed for each willfully misclassified individual and if a “pattern or practice” of willful misclassification is found to exist, the penalties increase to between $10,000 and $25,000 per violation.  Advisors will be jointly and severally liable for payment of these penalties.  Plus, a violator will be required to prominently post a State specified notice acknowledging its conduct on its Internet site and in a publically accessible area of its facility.  In the case of licensed contractors, notice of violations must also be given to the Contractors’ State License Board, which must initiate disciplinary proceedings.

Employees Given New Right to Recover Attorney’s Fees Incurred to Enforce Judgments for Unpaid Wages.  Under current law, the plaintiff in an action to recover unpaid wages is entitled to an award of attorney’s fees and costs.  Beginning January 1, 2012, Labor Code § 1194.3 will give employees who are required to enforce a judgment for unpaid wages the ability to recover the attorney’s fees and costs they incur in enforcing the judgment.

Employers Now Required To Notices at Time of Hire Summarizing Terms of Employment.  Currently, employers are not required to give written notice to employees of the terms and conditions of their employment.  Beginning January 1, 2012, under newly enacted Labor Code Section 2810.5 will require employers, at the time of hiring, to provide employees with a written notice communicating: (a) the rate or rates of pay the basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or otherwise, including overtime rates, if applicable; (b) if applicable, allowances claimed as part of the minimum wage, including meal and lodging allowances; (c) the employer’s regular payday; (d) the name of the employer including any “doing business as” names used by the employer; the physical address of the employer’s main office or principal place of business, and the mailing address, if different; and (e) the name and address of the employer’s workers’ compensation insurance carrier.  The Division of Labor Standards Enforcement is to prepare a form to be used to comply with this new provision and may require additional information to be listed.  If any required information changes, the employer must give all employees written notice of the change within seven calendar days unless all changes are reflected on an itemized wage statement issued to employees on a timely basis.

New Criminal Penalties for Willful Failure to Pay Awards and Judgments for Unpaid Wages.  As of January 1, 2012, newly added Labor Code § 1197.2 makes it a misdemeanor for an employer to willfully refuse to pay a court judgment or Labor Commissioner’s award for unpaid wages.  If the total amount of wages due is less than $1,000, the fine will be between $1,000 and $10,000 and the violator may be imprisoned for up to six months.   If the total amount of wages due is more than $1,000, the fine will be between $10,000 and $20,000 and the violator may be imprisoned for up to one year.  If there are multiple failures to pay wages involving more than one employee, the total due will be added together for purposes of determining the applicable penalty.

Labor Commissioner’s Enforcement Powers Enhanced.  Under amendments to Labor Code § 1197.1 effective as of January 1, 2012, the Labor Commissioner’s power to recover unpaid minimum wages will be enhanced.  The Labor Commissioner will now be able to issue a citation ordering restitution of underpaid wages to employees as well as assessing existing civil penalties of $100 per person per pay period for an initial violation and $250 per person per pay period for subsequent violations.  Beginning in 2012, the time for which the Labor Commissioner may file an action to collect a fee or penalty will be increased from one to three years.  The time period over which employers convicted of multiple wage violations are required to post bonds and provide accountings will also be increased from six months to two years.

If you have any questions, please contact Strauss Law Group.

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