California Legislative Update - May 2016

The California legislature has reached the midpoint of its 2016 legislative session. The Governor has signed four bills of significance to California private sector employers. In addition, a few dozen workplace-related bills have moved beyond their initial policy committees, and many have passed their house of origin and proceeded to consideration in the other legislative chamber. Major bills still in process would change private arbitration of employment disputes, and would create predictive scheduling requirements for some employees working on a shift basis.

This report summarizes the new laws and key bills still in process, and identifies other bills that still could make it to the finish line this year. The Legislature is required to complete its work for this year's session no later than August 31, 2016. After the Legislature enters its final recess, Governor Brown will have until September 30, 2016 to sign or veto bills passed by the Legislature at the end of the session.

New Laws

In an eight-day period last month, a bill on California's minimum wage went from stalled to signed. The state's minimum wage is headed to $15 an hour over six years, with the first step occurring on January 1, 2017. A full description of the amended minimum wage law is available here.

Governor Jerry Brown also signed a bill expanding workplace prohibitions on smoking in the workplace. The bill extends the prohibition on smoking in a place of employment to include an owner-operated business, and eliminates most of the specified exemptions that permit smoking in certain work environments, such as hotel lobbies, bars and taverns, banquet rooms, warehouse facilities, and employee break rooms. (ABX2-7; amends Labor Code section 6404.5.) A companion bill signed by Brown increases the minimum age for smoking from 18 to 21, with some exceptions. (SBX2-7; amends various sections to the Business and Professions, and Penal, Codes.)

The last bill addresses the "safe harbor" period of time that certain companies are provided to correct construction-related accessibility violations under the Unruh Act . The new and amended statutes establish a presumption that certain "technical violations" are presumed to not cause a person "difficulty, discomfort or embarrassment" for the purpose of an award of minimum statutory damages in a construction-related accessibility claim. The changes apply to small businesses (defined as employing 25 or fewer employees on average over the past three years, and having average annual gross receipts of less than $3,500,000 over the previous three years). The "safe harbor" is only applied where: (1) the claim is based on specific violations listed in the statutes; and (2) the small business corrects all of the technical violations included in the claim within 15 days of receiving written notice or the service of a summons and complaint regarding the accessibility claim, whichever is earlier. The bill took effect on May 10, 2016, as an urgency measure. (SB 269; amends Civil Code sections 55.53 and 55.56, and Government Code sections 4459.7, 4459.8, and 8299.06; adds Government Code sections 65941.6 and 65946 et seq.)

Key Pending Bills

The following outlines the current status of key pending bills. The measure's latest committee or house location is noted in italics.

Fair Scheduling

SB 878 is part of the "fair scheduling" trend. This legislation would require restaurants, grocery, and retail store establishments to provide a 21-day work schedule listing all shifts for employees at least seven days prior to the first shift on that work schedule. If changes were made to the schedule with less than seven days' notice, an employer would have to pay modification pay to the affected employee(s). The bill would also authorize the Labor Commissioner to order appropriate relief to aggrieved employees that could include reinstatement, backpay, the payment of modification pay withheld, and the payment of an additional sum up to $4,000 in the form of an administrative penalty. Aggrieved employees would also be allowed to bring a civil action against an employer for schedule shift change violations and be entitled to collect legal or equitable relief and reasonable attorneys' fees and costs. Senate Appropriations.

Three pending bills seek to limit arbitration as a dispute-resolution device in private employment. The legislators sponsoring these bills have stated publicly that, in light of Governor Brown's veto last year of AB 465,1 they want to legislate incrementally to attack pre-dispute binding arbitration agreements as a dispute resolution tool in non-union California workplaces.

AB 2667 would require a waiver of a legal right, penalty, remedy, forum, or procedure for a violation of the Unruh Civil Rights Act, including the right to file, notify, and pursue a civil action or complaint with the California Attorney General, the Department of Fair Employment and Housing, or any other governmental entity, to be: (1) knowing and voluntary; (2) in writing; and (3) not made as a condition of entering into a contract for goods or services or as a condition of providing or receiving goods and services. This bill would also require a person who seeks to enforce the waiver to have the burden of proving that the waiver was knowing and voluntary and not made as a condition of the contract or of providing or receiving the goods or services. This bill would apply to any agreement to waive a legal right, penalty, remedy, forum, or procedure for a violation of the act, including an agreement to accept private arbitration, made, modified, or renewed on or after January 1, 2017. Assembly Floor.

AB 2879's key provision would prohibit pre-dispute mandatory arbitration agreements, which was the substance of AB 465, vetoed by the Governor last fall. The bill would amend Section 394 of the Military and Veterans Code to prohibit a person from requiring a waiver of the...