In 2014, the California legislature passed approximately 900 new laws affecting California businesses and their owners. Many of these laws went into effect January 1, 2015, and still others become effective throughout the year. Staying on top of all these changes can be quite a daunting challenge. The following are some of the more significant changes to employment regulations that become effective in 2015.
Paid Sick Leave
The most widely publicized employment law passed in 2014 was Assembly Bill (“AB”) 1522, which becomes effective on July 1, 2015 provides that nearly all employees who work at least 30 days per year receive mandatory, paid sick leave which accrues at the rate of one hour for every thirty (30) hours worked. This means that every full-time (40 hours per week) employee could earn as many as 70 hours per year of paid sick leave.
The legislature did provide a small reprieve by allowing employers to put a "soft cap" on the accrual of the new benefits, as long as every employee receives a minimum of three (3) days (or twenty-four (24) hours) of paid sick leave each year. Part-time employees accrue benefits at the same rate, and may be subject to the same "soft cap." Much like vacation time, the new paid sick leave benefits will carry over to the next calendar year (though the maximum accrual from year-to-year may be capped at six (6) days or forty-eight (48) hours). Unlike vacation time, however, sick leave does
not need to be paid out at the time of separation (e.g. resignation, termination or layoff).
The new law provides that paid sick leave may be used to take care of the employee, as well as family members (including parents, grandparents, domestic partners, etc.). Failure to provide notice to all employees or failure to comply with the new requirements will subject the employer to statutory penalties, liability for lost wages/benefits, interest and, of course, plaintiff's attorneys' fees and costs.
Employers of all sizes are required to comply and very few employees are exempted from coverage. Employees may begin using their accrued benefits after 90 calendar days of continuous service.
AB 1660 makes it a violation of California’s Fair Employment and Housing Act (“FEHA”) to discriminate against a worker who presents a driver’s license which indicates that the individual does not have the legal right to work in the United States. This puts employers in the difficult position between complying with federal documentation obligations and California law. Pursuant to existing California law (AB 60) an individual who is not authorized to work in the United States may obtain a drivers’ license. That license bears language indicating that the individual is not authorized to work. Nonetheless, if an employee offers this new drivers’ license to satisfy a bona fide job requirement (e.g. delivery driver) an employer is precluded from denying the employee employment on the basis of his license.
AB 1443 extends protections normally reserved for employees under the FEHA to unpaid interns. Employers are now prohibited from engaging in unlawful discrimination or harassment against any intern in the selection, termination, training or other terms of “employment”.
It should be noted that the new law seems to extend the application of FEHA's anti-discrimination and anti-harassment protections to any individual receiving work experience, in lieu of wages, not just those labeled “interns”.
Cell Phone Reimbursements
One California Court ruled, late last year, that an employer is required to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone. The court felt that an employer refusing to reimburse such costs would receive an unfair benefit because it would be passing its operating expenses onto the employee. Thus, to be in compliance with California law an employer must pay some “reasonable percentage” of the employee's cell phone bill, if it is used for business purposes.
And just to add insult to injury, the IRS has also increased the mileage rate. For business-related travel in an employee's personal vehicle, the reimbursable rate was increased to 57.5 cents per mile, an increase of one and one-half cents from the rate which had been in effect since January 1, 2014.
This is notable because in California, an employer is required to indemnify its employees for all "necessary expenditures or losses" incurred by the employee in direct consequence of the discharge of his or her duties (Cal. Labor Code §2802) including expenses associated with the business use of his or her personal vehicle.
Much as we all make resolutions to improve ourselves in the near year, we advise improving your business in the New Year by ensuring you are in compliance with California law. As always, best practices dictate that you consult with competent legal counsel when making these changes.
Nothing contained herein should be construed as providing legal advice.