NEW EMPLOYMENT REGULATIONS RING IN NEW YEAR

Paraphrasing the late, great Andy Williams: "It's the most wonderful time of the year . . . for employment attorneys! " With year-end right around the corner, businesses everywhere are scrambling to make sure their policy manuals are up-to-date, their managers are trained on the latest harassment, discrimination and retaliation issues, and they have taken every precaution to ensure compliance with a bevy of new laws set to ring in the new year. Is your business ready?

While we have previously addressed several of these in earlier articles, which can be found here, the following are some laws that become effective on January 1, 2013:

New Document Retention and Production Requirements

When the Governor signed AB 2674 in September 2012, a new record-keeping and production burden was placed on all California employers. As was the case before AB 2674, employers are required to maintain all payroll and personnel records for all current and former employees, and allow access to those records upon demand by the employee. However, the new law mandates that employers maintain those personnel records during the entire pendency of employment AND for a three-year period following termination.

Further, once an employee demands inspection, the employer has 30 days to allow the employee to review the contents of the personnel file. Also, the new bill expands existing law by requiring an employer to produce a copy of all personnel files, upon written demand. The employer is allowed to redact the names or personal information of any other non-supervisory employee, if included on the documentation, but must otherwise provide copies of the entirety of the records to an employee (or disgruntled former employee).

Failure to comply with a records request may result in a $750.00 civil penalty per violation, injunctive relief and (the ever-dreaded) attorneys' fees, meaning that we can expect this to become a new frontier for litigation in 2013 and beyond.

Accommodation of Religious Dress and Grooming Standards

Effective January 1, 2013, an employer must accommodate an employee's religious dress and grooming standards, unless doing so would be a significant undue hardship upon the business. AB 1964, which was signed in October, revises the California Fair Employment and Housing Act ("FEHA") [Cal. Government Code §12940, et seq.], and indicates that the "wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts and any other item that is part of the observance by an individual of his or her religious creed" creates an affirmative obligation for the employer to reasonably accommodate the standard. In order to qualify for the undue hardship standard, an employer must demonstrate that the employee's dress or grooming practice would cause "significant difficulty or expense" for the business. This will undoubtedly become another blossoming area for future litigation claims based upon religious discrimination.

Breastfeeding Protections Expanded

The Legislature also approved AB 2386 earlier this year, which adds breastfeeding and "medical conditions related to breastfeeding" to the existing definition of "sex" under the FEHA. The law already precluded discrimination or harassment in the workplace based upon "sex," and the Legislature indicated that the addition of breastfeeding as a subset of existing protections was simply a clarification of existing law, which means that the additional protections became effective upon signature by Governor Brown on September 28, 2012.

IRS Mileage Reimbursement Rate Increase

In October 2012, the Internal Revenue Service published its revised guidelines for mileage reimbursement, which will go into effect on January 1, 2013. For business-related travel in an employee's personal vehicle, the reimbursable rate increased to 56.5 cents per mile, an increase of one cent from the 2012 rate.

In California, an employer is required to indemnify its employees for all "necessary expenditures or losses" incurred by the employee as a direct consequence of the discharge of his or her duties (Cal. Labor Code §2802). If an employer reimburses the employee at the IRS approved rate, that payment is presumed to be sufficient. However, if an employer chooses to reimburse the employee at a rate other than the IRS approved standard, the burden falls squarely upon the employer to establish that the rate was adequate under the circumstances to reimburse the employee for his/her actual business-related expenses. As such, it is recommended that, except under very limited circumstances, California employers should reimburse at the IRS-approved rate.

Use of Expired Employment Eligibility Verification Forms

Within 72 hours of hiring a new employee, an employer is required to obtain a completed Form I-9 from the new employee, indicating the employee's eligibility to work legally in the United States. As part of this verification process, employees are required to present identification to verify that they are eligible to do the work. If the employee is unable to present the requisite documents within that initial 72-hour window, s/he cannot legally work for your business.

From time-to-time, the U.S. Citizenship and Immigration Service (USCIS) updates the Form I-9 -- which was expected earlier this year. The current Form I-9 approved by the USCIS expired (as shown on the face of the document) on August 31, 2012. However, the USCIS apparently has no immediate plans to issue a new form. As such, the agency has indicated that employers should continue to use the most recent, expired form until such time that a revised Form I-9 is issued. Stay tuned, because the USCIS could approve the new form at any time, and make the new form effective immediately!

In light of the recent election results, 2013 is poised to be an active year for employment-related legislation, keeping employment attorneys – both plaintiffs' and employers' counsel – on their toes. As always, businesses should consult with competent employment law counsel to ensure that they remain on top of their ever-changing obligations before they find themselves embroiled in costly and time-consuming litigation.