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Important Changes to Employment Laws in California, Effective January 1, 2013

By Gregory Bergman, Managing Partner In the last quarter of 2012, California Assembly and Senate legislation was passed that make several important changes to employment laws in California. These changes will go into effect no later than January 1, 2013. As an extra value service to our friends, colleagues, and clients, BDG provides to you a summary of those bills that may impact you and your business. BDG has an exceptional strong labor and employment practice representing private and public entity clients and, should you require, can evaluate your existing handbook and ascertain what revisions are necessary in light of these changes. For additional information about our experience, please visit us at www.bdgfirm.com. AB 1744Hiring notice and wage statement obligations for temporary services employers This bill amends Labor Code sections 226 and 2810.5, and adds new Labor Code section 226.1. Under the existing Wage Theft Prevention Act of 2011, employers must provide their nonexempt employees a written notice at the time of hiring that contains specified information, such as the rate and basis of the employees wages, and the employers name, address, and telephone number. This bill provides that, for temporary services employers (defined in Labor Code section 201.3), such notices also must include the name, physical and/or mailing address, and telephone number of the legal entity for whom the employee will perform work. Starting July 1, 2013, this bill further provides that temporary services employers must include on itemized wage statements (in addition to the other information required by existing Labor Code section 226(a)), the employees rate of pay and total hours worked for each temporary assignment. This requirement does not apply to licensed security services companies. AB 1844E-mail and social media account passwords This bill adds new Labor Code section 980, and prohibits an employer from requiring or requesting an employee or applicant to: (1) disclose a username or password for the purpose of accessing personal social media, (2) access personal social media in the presence of the employer, or (3) divulge any personal social media to the employer. Page 1 of 4

The bill also prohibits an employer from discharging, disciplining, threatening to discharge or discipline, or otherwise retaliating against an employee or applicant for not complying with a prohibited request. Employers may, however, continue to request or require passwords to access an employer-provided electronic device. Also, this law does not affect an employers existing right to request access to social media when relevant to investigate suspected violations of the law or employee misconduct. California is the third state to enact a social media policy law. AB 1964Religious dress and grooming practices protected By FEHA This bill amends the California Fair Employment and Housing Act (FEHA), Government Code sections 12926 and 12940, to specify the scope of the statutes protections against potential religious discrimination. The FEHA prohibits an employer from discriminating against an applicant or employee based on his or her religious creed, including all aspects of religious belief, observance, or practice. This bill specifies that these protections extend to: (1) religious dress practices, which include wearing or carrying religious clothing, head or face coverings, jewelry, artifacts, and any other item that is part of the persons religious observance; and (2) religious grooming practices, which include all forms of head, facial, and body hair that are part of the persons religious observance. The bill further provides that an accommodation of a persons religious dress or grooming is not reasonable if it would: (a) require segregating the person from other employees or the public, or (b) result in a violation of the FEHA or other civil rights laws. Therefore, the employer must consider addressing this bill (1) by amending handbook provisions that make flat prohibitions regarding dress and grooming practices, and (2) addressing accommodation issues as they arise, similar to addressing accommodations for disabilities. AB 2103Overtime rate for non-exempt, full-time salaried employees This bill amends Labor Code section 515 to prohibit private agreements that contravene the overtime regular rate calculation required for non-exempt full-time salaried employees. Under existing Labor Code section 515(d), to calculate overtime wages earned by such employees, the regular hourly rate used must be 1/40th of the employees weekly salary. This bill specifies that payment of a fixed salary to a non-exempt employee must be deemed compensation only for regular, non-overtime hours worked, notwithstanding any private agreement to the contrary. AB 2343 - DOJ Criminal History Reports This bill requires agencies, organizations, and individuals, that received criminal history information from the California Department of Justice to give notice to an applicant or employee who is the subject of an adverse employment, licensing, or certification decision based on the information obtained. This new reporting requirement models those already found in the Fair Credit Reporting Act and the California Investigative Consumer Reporting Agencies Act.

AB 2386Breastfeeding protected under FEHA This bill amends the definition of sex under the FEHA, Government Code section 12926. Existing law prohibits employment discrimination on the basis of sex, defined to include gender; gender identity and expression; and pregnancy, childbirth, or related medical conditions. This bill clarifies that for all purposes under the FEHA, sex also includes breastfeeding and related medical conditions. The bill provides this amendment is declaratory of existing law; thus it may be applied retroactively and takes effect immediately. AB 2396 - Employment of infants in the entertainment industry This bill extends the current law which restricts the employment of infants in the entertainment industry, by requiring the completion and submission of a medical certification and approval before a temporary permit for the employment of the infant may be issued. AB 2674Employees right to inspect personnel records; wage statement retention This bill amends Labor Code section 1198.5, which gives employees the right to inspect their personnel records at reasonable intervals and times. AB 2674 provides the employer must make the records available for inspection by any current or former employee or his/her representative, and provide a copy of the records, within 30 calendar days from receipt of a written request, or if the parties agree in writing, within no more than 35 calendar days. Employers must make available to the current or former employee or representative a form that can be used for the inspection request. The bill further specifies other time, place, and method obligations for inspection and delivery of the records. The bill requires employers to keep a copy of the employees personnel records for at least three years after termination of employment. The bill provides that if a current or former employee files a lawsuit against the employer regarding a personnel matter, his or her right to inspect or copy personnel records ceases during the pendency of the lawsuit. The bill further provides that an employer may: (1) designate the person to whom records requests are made, (2) take reasonable steps to verify the identity of the employee or representative making the request, and (3) redact the names of nonsupervisory employees contained in the records. AB 2674 also amends Labor Code section 226 with respect to the obligation for employer retention of wage statements. Existing law requires employers to keep copies of wage statements for at least three years, either at the employment site or a central location within the state. This bill clarifies that copies may include duplicates of the statements provided to the employee, or computer-generated records that accurately show all information required to be included on the wage statement. AB 2675Written contracts for commission pay: exceptions Page 3 of 4

This bill amends Labor Code section 2751, which requires a written contract of employment for services rendered in the state and paid for by commissions. The current statute excludes from its obligations two types of compensation: (1) short-term productivity bonuses such as are paid to retail clerks; and (2) bonus and profit-sharing plans, unless the employer offers to pay a fixed percentage of sales or profits as compensation for work to be performed. This bill adds a third exclusion category for temporary, variable incentive payments that increase, but do not decrease, payment under the written contract. It is advised that an employer set forth in writing to employees the material terms of all types of compensation paid, including the rates and methods of computation. SB 1193 Human Trafficking This bill will require specified employers to post a notice that contains information related to slavery and human trafficking in a conspicuous area, readily visible to employees and the public. SB 1255Remedies for failure to provide accurate itemized wage statements This bill amends Labor Code section 226(e) to specify the circumstances when employees may recover penalties under that statute for failure to receive accurate itemized wage statements. Section 226 generally requires employers to provide employees with accurate wage statements showing nine specific categories of information, e.g., gross and net wages earned, deductions, and inclusive pay period dates. If an employee suffers injury as a result of an employers knowing and intentional failure to comply with these requirements, the employee can recover certain penalties for each violation, plus costs and attorneys fees. SB 1255 specifies that, for purposes of entitlement to these penalties, an employee is deemed to suffer injury in two instances: (1) if the employer fails to provide a wage statement; or (2) if the employer fails to provide accurate and complete information for any of the nine items required, and the employee cannot promptly and easily determine the information from the wage statement alone.