Employment Laws on the Horizon — What Employers in California May Expect in 2015; San Diego Raises Minimum Wage

California employers will have to wait to see whether significant employment law bills will successfully make their way through both houses of the Legislature and meet the fateful pen of Governor Jerry Brown.  A number of proposed laws could impact areas of minimum wage, paid sick leave, anti-discrimination laws and enforcement of unpaid wage claims for California workers.  Additionally, California cities have forged ahead with their own employee friendly ordinances.  San Diego recently became the largest city in the U.S. to pass an increased minimum wage and paid sick leave ordinance.

In the area of minimum wage, SB 935 seeks to raise the minimum wage of public and private employees to $11 per hour by January 1, 2015, $12 per hour by January 1, 2016, and $13 per hour by January 1, 2017.  SB 935 would further seek to raise minimum wage every year thereafter based upon the California Consumer Price Index (“CPI”), without any downward adjustments.

SB 935 would effectively supersede very recent minimum wage increases that raised the minimum wage to $9 per hour effective July 1, 2014, as well as another increase scheduled for $10 per hour effective January 1, 2016.  The City of San Francisco’s current minimum wage is $10.74 per hour, which became effective January 1, 2014.  Numerous California cities have announced efforts to institute local minimum wage ordinances, including Los Angeles, Berkeley, Richmond and Santa Clara County.

On July 14, 2014, the San Diego City Council passed an ordinance, which is set to raise the minimum wage to $11.50 an hour by 2017 and mandate employers to provide paid sick leave.   The minimum wage in San Diego will rise to $9.75 an hour by 2015, then increase to $10.50 an hour on January 1, 2016, and $11.50 an hour on January 1, 2017.   Although discussed, there will be no exemptions for smaller employers.  Similar to the state law being considered, San Diego’s minimum wage would be tied to the CPI after the final increase.  Under the ordinance, sick pay will accrue at the rate of 1 hour per 30 hours worked within San Diego limits, up to five paid sick days.

On the state side, AB 1522, which would require employers to provide California employees with paid sick leave, will likely create a standoff between employer and labor interests.  The bill would require all employers, large and small, public and private, to provide California workers with paid sick leave.  The current version of the bill would require one hour of sick leave to be accrued for every 30 hours worked, beginning on the 90th calendar day of employment.  Workers under a valid collective bargaining agreement that already provides for paid sick leave would be exempt if they meet certain criteria.

After a recent series of employer friendly court decisions protecting the employer’s contractual right to arbitrate employment claims, AB 2617 would seek to reverse that trend.  AB 2617 would effectively restrict arbitration of many employment related claims, including those pursuant to the Fair Employment and Housing Act.  AB 2617 would also prohibit other agreements that may have the effect of waiving various rights to remedies and procedures as against public policy.  The proposed law would be prospective and is designed to “apply to any agreement to waive any legal right, penalty, remedy, forum, or procedure for a violation of this section, including an agreement to accept private arbitration, entered into, altered, modified, renewed, or extended on or after January 1, 2015.”

Sexual harassment training requirements may also be modified in 2015.  Existing Government Code section 12950.1 mandates that all California employers with 50 or more employees must provide two hours of sexual harassment prevention training to their supervisors and managers every two years and that all new supervisors and managers must complete this training within six months of hire or promotion.  If passed, AB 2053 would add the component of the prevention of “abusive conduct” to this already required training.  AB 2053 defines “abusive conduct” as “conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.”  Notably, this departs from the focus of the training against harassment based on sex, and would now include a training against: “repeated infliction of verbal abuse, such as the use of derogatory remarks, insults, and epithets, verbal or physical conduct that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance” – without specifying a motivation on account of sex or gender.

Last year, the California Department of Motor Vehicles was mandated to develop regulations to permit undocumented persons to apply for a California driver’s license.  There has been continued debate as to the form and appearance of such a license so that it would not appear to be identical to a regular driver’s license.  AB 1660 would now make it a violation of the Fair Housing and Employment Act to discriminate against an individual because he or she holds or presents a driver’s license issued under these provisions.  Still, AB 1660 reiterates that “nothing in this section shall be construed to alter an employer’s rights or obligations under Section 1324a of Title 8 of the United States Code regarding obtaining documentation evidencing identity and authorization for employment.”  Further, any action taken by an employer that is required by the federal Immigration and Nationality Act would not be deemed a violation of California law. Finally, AB 1660 would make information submitted to apply for such driver’s licenses confidential and exempt from the California Public Records Act.

Further, in the realm of Labor Commissioner proceedings, employees may find a quick leverage tool in initiating claims against their employers.  Earlier this year, a law came into effect that any affirmative final recovery under a Labor Commissioner Order, decision or award “shall” create a lien that the Labor Commissioner may record on the employer’s real property.  AB 2416 would further those remedies and create “priority” liens against employer property for filed, but yet unproven wage claims.  The rationale behind such enforcement mechanism for judgments is to encourage employers to quickly unpaid wages.  However, such an enforcement mechanism may encourage frivolous claims against employers with drastic consequences.

A number of other proposed employment laws that would expand employer liability on a number of fronts are also pending.  Garcia, Hernández, Sawhney & Bermudez LLP will continue to update clients and colleagues on the status of these bills and others this fall 2014.  If you have questions on this update, please contact Nadia P. Bermudez or Eran M. Bermudez at (619) 564-8400.