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Legal Update

New California Laws Take Effect January 1

2 January 2018
Mayer Brown Legal Update

California has enacted two new pieces of legislation to take effect on January 1, 2018, that are intended to improve job opportunities, and opportunities for women in particular. This continues a nationwide trend toward the adoption of laws aimed at combating workplace gender inequities. The first bill, SB-63, expands the California Family Rights Act (CFRA) to provide up to 12 weeks of unpaid parental leave for employees of companies with as few as 20 employees. The second bill, AB-168, prohibits employers from seeking or relying on a job applicant’s salary history information when deciding whether to offer employment and what salary to offer and requires employers to provide the pay scale for a position to an applicant, upon request.

Expanded Parental Leave

CFRA, which is California’s existing family leave law, generally tracks the federal Family and Medical Leave Act by requiring employers of 50 or more employees within a 75-mile radius to grant an employee’s request to take up to 12 weeks of family care and medical leave in any 12-month period. SB-63 broadens CFRA protections to employers with at least 20 employees within a 75-mile radius. Thus, employers with 20 or more employees must grant an employee up to 12 weeks of unpaid parental leave to bond with a new child within one year of the child’s birth and must continue to provide group health coverage during that leave. Such parents’ leave is protected, and employers are prohibited from firing, refusing to hire or otherwise discriminating against employees who take advantage of their leave. The new law takes effect on January 1, 2018, and is expected to expand parental leave rights to 2.7 million workers who were previously ineligible for protected leave because they work for small employers.

SB-63 follows a 2016 California law increasing the compensation employees may receive from the state for paid family leave. It also adds to a list of similar laws passed in other US jurisdictions aimed at expanding parental leave rights:

  • In July 2017, Washington state passed a law providing eligible employees up to 12 weeks of paid time off after the birth or adoption of a child. When the law becomes effective in 2020, employees will be paid up to 90 percent of their ordinary wages.
  • In December 2016, Washington DC enacted similar legislation, granting eight weeks of paid leave to new parents, beginning in 2020.
  • In April 2016, New York passed legislation granting up to eight weeks of paid leave at up to 50 percent of salary beginning in 2018, which will gradually increase to 12 weeks of paid leave at up to two-thirds of salary by 2021.

Meanwhile, other states have looked to introduce paid parental leave bills, and legislatures in Massachusetts and other states with existing unpaid parental leave laws—including Connecticut, Oregon and Vermont—have considered enacting paid parental leave.

Prohibition on Considering Salary History

California also enacted a law aimed at strengthening equal pay protections. AB-168 amends the California Labor Code to prohibit employers from “rely[ing] on the salary history information of an applicant for employment as a factor in determining whether to offer employment to an applicant or what salary to offer an applicant” or “seek[ing] salary history information, including compensation and benefits, about an applicant for employment.” These restrictions do not apply to job applicants who “voluntarily and without prompting” disclose their salary history to a prospective employer or to salary history information that is publicly disclosed under a federal or state law, such as the California Public Records Act or the federal Freedom of Information Act. AB-168 further mandates that “[a]n employer, upon reasonable request, shall provide the pay scale for a position to an applicant applying for employment.” AB-168 becomes effective on January 1, 2018.

California’s new legislation follows laws already in place in Oregon and Puerto Rico, as well as laws already passed in Delaware, Massachusetts, New York City, San Francisco and Philadelphia that are due to take effect within the next year. And there is reason to believe that more states will adopt similar laws in the near future: in 2017 alone, lawmakers in more than two dozen states have proposed legislation that would prohibit employers from asking candidates about their salary histories.

Recommendations

  • Expanded Parental Leave: This will require many smaller employers to navigate the complexities associated with administering protected leave policies. As a result, companies that suspect they may be covered by the new law should determine whether they are covered and, if they are, should adopt procedures and policies to address the new employee entitlements. Supervisors and human resources personnel should also be further trained about employees’ rights to parental leave and the prohibition on discriminating against such employees.
  • Prohibition on Considering Salary History: Employers should conduct a thorough review of their hiring procedures, train employees responsible for interviewing and hiring job applicants and determine if standard interview questionnaires and job interview “scripts” should be revised. Employers may also consider creating alternative questions for job candidates that would provide them with the information they may want to know before setting a salary: for example, asking a candidate what salary he or she expects to earn.

Authors

  • John Zaimes
    T +1 213 229 9545
  • Ruth Zadikany
    T +1 213 621 3916
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