California businesses take notice: New state laws will soon affect minimum wage, leave, wage equality, reasonable accommodation and motor carrier requirements. Affected businesses need to stay ahead of the changes or face the consequences.

Labor Law Changes

Minimum Wage

Legislation passed in 2013 raised California’s minimum wage would be increased to $10 per hour, effective January 1, 2016.

Upcoming minimum wage changes:

City of Los Angeles and LA County:  $10.50 effective 7/1/16 (Businesses with fewer than 26 employees will not be subject to the new minimum wage until 7/1/17).

School Activities Leave

SB 579 expands Labor Code section 230.8 which requires an employer who employs 25 or more employees, to provide an employee up to 40 hours each year and no more than eight hours in a calendar month for the purpose of participating in school activities, including activities at child care facilities.

Gender Wage Equality

SB 358 (Fair Pay Act) revises Labor Code section 1197.5, which indicate employers cannot pay an employee less than the rate paid to an opposite-sex employee in the same establishment for equal work on jobs that require equal skill, effort and responsibility. SB 358 prohibits an employer from paying any of its employees less than employees of the opposite sex for “substantially similar work, when viewed as a composite of skill, effort and responsibility.”

Reasonable Accommodation and Retaliation

AB 987 clarifies that an employer can’t retaliate or discriminate against an employee for requesting a reasonable accommodation for a disability or religion, regardless of whether the request was granted. The law clarifies that the mere act of making the request is protected conduct under the Fair Employment and Housing Act.

Piece Rate Workers

AB 1513 sets forth new rules for employers with piece-rate employees. The law requires employers to pay piece rate workers for rest and recovery periods and other non-productive time at specified minimum hourly rates. This compensation must be separate from the piece rate compensation. The law includes a definition of “other non-productive time. It also mandates that specific information must now be included on a piece rate employee’s itemized wage statement (pay stub). For instance, the total hours of compensable rest and recovery periods must now be included on the pay stub.

‘Safe Harbor’ provision: Prior Years’ Break Time Payments. For unpaid rest and recover periods prior to December 31, 2015, the employer shall have until December 15, 2016within which to pay employees the appropriate payments for past years beginning July 1, 2012 through December 31, 2015. If done timely and properly, this shall be a complete defense to any claim of non- or late payment. Payment can be calculated in one of two ways:

  1. The payment must be consistent with paragraph 6 above and interest must be included using a formula set forth in Labor Code section 98.1; OR
  2. The employer pays each employee 4% of the employee’s gross earnings during the applicable piece rate pay periods beginning July 1, 2012 (less amounts paid for rest and recovery periods and other nonproductive time, provided that this reduction shall not be more than 1% of the employee’s gross earnings).

Misclassification Amnesty for Motor Carrier Employers

AB 621 establishes the Motor Carrier Employer Amnesty Program for port transportation companies (also known as port drayage companies).

Motor carrier companies can be relieved of liability for penalties associated with misclassification of commercial drivers as independent contractors if the companies enter into a settlement agreement with the Labor Commissioner before January 1, 2017, and agree to convert the workers to employees and pay any owed wages, benefits and taxes.