Changes in federal and California laws will affect every stage of the employment relationship in 2012. Below are the most important changes:
1. What to Know When Initiating an Employment Relationship.
Use of credit reports is now limited. Employers are prohibited from using an applicant's or employee's credit history in making employment decisions, except (a) for a managerial position; (b) for a position in the California Department of Justice; (c) for a sworn peace officer or other law enforcement personnel; (d) where the information is required by law; (e) where the relevant position has regular access to confidential information like social security numbers, dates of birth or credit card information; (f) where the relevant position can enter into finanical transactions on behalf of the employer; (g) where the position has access to confidential or proprietary information that is defined as a "trade secret" under California law; or (h) for a position that regularly involves access to cash in excess of $10,000 (of the employer or a customer or client).
Employers must provide each employee with written notice of pay information on hire and in the event of a change. An employer must provide non-exempt new hires with a notice of the employee's rate or rates of pay, the basis on which wages will be calculated (hourly, daily, salary, commission, piece, etc.), allowances claimed as part of the minimum wage, if any, the employer's designated payday, overtime rates, the name of the employer, including any fictitious business names, the employer's physical and mailing addresses and phone number, and the name and contact information of the employer's worker's compensation carrier. If this information changes, the employer must advise the employee of the change in writing within seven calendar days. No separate notice is required if the changes are reflected on a timely wage statement or other specified writing.
2. Expansion of the Laws on Genetic Information and the Definition of "Gender."
California employers are prohibited from discrimination based on genetic information. California law now more expressly prohibits employers with five or more employees from discrimination, retaliation or harassment of any employee on the basis of genetic information, which includes any request for or receipt of genetic services, or an employee's or employee's family member's participation in clinical research that includes genetic services. The law includes a prohibition against reliance on (a) an individual's genetic tests; (b) genetic tests of an employee's family member; or (c) manifestation of a genetic disease in family members. Remember, the federal Genetic Information Nondiscrimination Act covers employers with 15 or more employees.
The definition of "gender" has been expanded to include a person's gender identity and gender expression (meaning a person's gender-related appearance and behavior, whether or not stereotypically associated with the person's assigned gender at birth).
3. Changes to Wage and Hour Laws
Exercise caution when you retain an individual as an independent contractor, or pay the price. Employers are now subject to civil penalties, liquidated damages and other disciplinary action when they willfully misclassify individuals as independent contractors when they should be treated as employees, and when they make deductions from independent contractors that could not be deducted for employees.
Enhanced consequences for employers who fail to pay minimum wage. Employees who are denied minimum wage may recover liquidated damages. Additionally, the employer must pay restitution of wages to the employee. This obviously would apply in a situation in which there was a blatant failure to pay minimum wage to an hourly employee, and also could apply to an employee incorrectly classified as "exempt," if the actual hourly rate did not meet the minimum wage requirements.
Commission Agreements Must Be in Writing. Beginning January 1, 2013, all employment relationships that provide for payment of commissions must be in writing, and must include the method by which commissions are computed and paid. Employers must sign the summary and employees must receive a copy of the signed document. The commission plan contained in that agreement will be presumed to remain in full force until the agreement is superseded or the employment relationship terminates.
4. Changes to Leaves of Absence Laws
What is "one year" for bone marrow or organ donation leaves of absence? As of 2011 all California employers with 15 or more employees must provide a paid leave of absence of up to 30 days in any "one year period" to employees for the purpose of donating an organ to another person, and up to 5 days paid leave during that period for bone marrow donation. The "one year" is now defined as a rolling 12-month period, measured forward from the date an employee first takes such a leave. This leave is measured in business, not calendar, days and is not considered a break in service for purposes of benefit accrual and seniority.
Employers may not "interfere" with an eligible employee's request for family or medical leave or pregnancy disability leave. In addition to a prohibition against denying an eligible employee's request for leave to care for the employee's own serious health condition, to care for a family member with a serious health condition, to bond with a child or for disability due to pregnancy or childbirth, it is unlawful for an employer to interfere with or restrain the exercise or attempted exercise of any right provided to an employee under the California Family Rights Act ("CRFA") or the Pregnancy Disability Leave ("PDL") laws.
Employers must now maintain insurance for employees on pregnancy disability leave. Employers are prohibited from refusing to maintain and pay for insurance coverage for the duration of maternity leave (up to four months). An employer may recover insurance premiums paid during the leave if the employee fails to return from disability leave for reasons other than the employee is taking additional leave under the California Family Rights Act for a health condition that entitles the employee to leave, or for other reasons beyond the employee's control.
5. New Posting Obligation from the National Labor Relations Act. Most private-sector employers are required effective January 31, 2012 to notify employees of their rights under the National Labor Relations Act by posting a notice. Copies of the notice will be available on the National Labor Relations Board ("NLRB") website and from NLRB regional offices. The notice must be posted in English and in another language if at least 20% of employees are not proficient in English and speak the other language. The Board will provide translations of the notice, and of the required link to the Board’s website, in the appropriate languages. Employers also must post the notice on an intranet or an internet site if personnel rules and policies are customarily posted there.