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March 2019

NEW Legislation for Employers – 2019 Legal Updates

Now that we are nearing the end of Q1 2019, we wanted to remind you of some recent laws that are in place in California as of January. The new legislative decisions for California employers were enacted largely in response to the #metoo movement and to bring awareness to issues involving sexual misconduct in the workplace. Employers, please be sure to take note of the following when reviewing your current policies.  In addition, the State Contractors License Board has made some changes that all in the construction industry need to be aware of.

SB 1300  - FEHA updates, harassing conduct

This bill made a significant number of employee-friendly changes to the Fair Employment and Housing Act (FEHA) effective January 1, 2019. While previously the subject of case law, some of these changes are now codified under the state Government Code. Notably, the bill now extends the responsibility of employers over the acts of non-employees, not only for acts of sexual harassment, but for all other types of harassment based on other protected characteristics, including race, religion, color national origin and ancestry. Additionally, the bill provides that a single incident of harassing conduct may be sufficient to create a hostile work environment while also providing that “stray remarks” may be considered as relevant evidence on a harassment claim, even if uttered by someone other than the decision maker in some other context. Furthermore, the law now also provides that harassment cases are “rarely appropriate for disposition on summary judgment.”

Employers are also prohibited from requiring employees to sign, as a condition of employment (including for a raise, bonus, or continued employment) an agreement which waives an employee’s FEHA rights; an agreement preventing the employee from disclosing information about unlawful workplace acts including, but not limited to, sexual harassment; or a statement that he or she does not “possess any claim or injury against the employer.” At this time, it does not appear these limitations apply to “negotiated” settlement agreements, but it remains to be seen if this new provision extends to severance agreements.

AB 2770 – Communication re former employee

Under existing law, a former employer is permitted to apprise a prospective employer whether they would rehire the applicant/former employee, as the communication is considered privileged and protected and therefore immune from a defamation lawsuit. With the addition of this bill however, an employer may now also disclose that a former employee is not eligible for rehire based on the employer’s determination that the former employee engaged in sexual harassment, so long as the allegations were based on credible evidence.

In addition, an alleged perpetrator may not bring a later claim for defamation, slander, and/or libel against an employer or the employee who reported complaints of sexual harassment to the employer, again, so long as the allegations were made without malice.

SB 1343 – Sexual harassment training

Currently the FEHA requires employers with 50 or more employees to provide at least two hours of sexual harassment training to its supervisory employees within six months of their hire date and once every two years thereafter. Effective January 2019, this law will require an employer with five or more employees, including temporary or seasonal employees, to provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020. Additionally, the Department of Fair Employment and Housing will be required to develop and post one-hour and two-hour training courses on the prevention of sexual harassment to its web site.

Also on the horizon, SB 970 will require specified employers in the hotel and motel industry to provide at least 20 minutes of training and education regarding human trafficking awareness to employees who are likely to interact or come into contact with victims of human trafficking. Such positions would include employees working in reception, housekeeping, or who drive customers. This training shall be administered within six months to those employed as of July 1, 2019, and to all new hires. After January 1, 2020 the employer shall administer this training once every two years and within six months of an employee’s hire.

AB 3109 – Prohibition of waiver of right to testify re sexual harassment

Effective January 1, 2019 this bill renders void and unenforceable any provision in a contract or settlement agreement which waives a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment.

SB 820 – Prohibition of confidential settlements re sexual harassment

This bill prohibits confidential settlements or non-disclosure agreements involving cases of sexual harassment, assault, or discrimination. However, the bill does not ban confidentiality of the settlement payment amount. Additionally, the bill specifically allows inclusion of provisions which protect the victim’s identity.

AB 2282 – Salary history inquiries

This bill clarifies ambiguities in existing law (Labor Code sections 432.3 and 1197.5) prohibiting an employer from relying on salary history in setting an employee’s compensation by defining the terms “pay scale,” “reasonable request” and “applicant.” The bill explains that these provisions do not prohibit an employer from inquiring of an applicant what their salary expectation is for the position sought. The bill also allows an employer to make a compensation decision based on a current employee’s salary so long as any resulting wage differential is justified by one or more specified factors, like seniority or merit.

SB 826 – Women on boards of publicly held businesses

This new law requires all publicly held businesses whose principle executive offices are located in California to have at least one woman on their board of directors by the end of 2019. By 2021, this requirement increases to two women if the corporation has five directors, and at least three women if the corporation has six or more directors.

AB 1619 – Statute of limitations re sexual assault

This new bill amends the statute of limitations from three years to 10 years for civil claims of sexual assault (Code of Civil Procedure section 340.16.) In situations where the sexual assault occurred on or after the victim’s eighteenth birthday, the extended statute will now be the later of either 10 years from the date of the last act, attempted act, or assault with intent to commit an act of sexual assault, or, within three years from the date the victim discovers, or reasonably should have discovered, the injury or illness as a result of the sexual assault.

SB 721 – The “Balcony Bill”

Following the tragic balcony collapse in San Francisco, this bill was passed to require inspections and repairs of “exterior elevated elements” (balconies and decks) in buildings with three or more multi-family dwelling units. The bill establishes reporting and repair requirements and time frames for repairs, and details who can complete the inspections and repairs.  Civil penalties can be assessed for failure to comply.

SB 1465 – Reporting settlements, arbitration awards, and civil judgments

This bill is a substantial change for contractors.  Licensed contractors and their insurers are required to report to the CSLB any final civil judgment, settlement, or arbitration award involving damage claims over $1,000,000 for construction defects in multi-family rental residential structures.

AB 2654 - Design-Build contracts approved for Orange County and Orange County Flood Control District

This new law authorizes the County of Orange to use the design-build process for specified types of public works infrastructure projects, limited to no more than one project per year in excess of $5,000,000 (the Orange County Flood Control District has a limit of no more than 12 projects in excess of $5,000,000 prior to January 1, 2025).

AB 2705 – Statute of limitations re unlicensed contractor, criminal penalties

This bill expands the statute of limitations from one year to two years during which an unlicensed contractor can be prosecuted criminally for failing to obtain workers’ compensation insurance. 

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It is important for employers to keep abreast of these new legal developments. For questions regarding any of the new or updated laws and changes, please contact me to connect with the Employment Law practice group at Gordon Rees Scully Mansukhani.