Posted on February 6th, 2020
Several laws are going into effect next year that impact business owners. Here are the newest California laws for business and what you need to know.
The California legislature has passed several regulations that impact both the employer and employee alike. The topics include worker classification, wages and working hours, workplace training and job security, and many others.
In this article, we’ll offer a brief overview of the new California laws that come into play on January 1, 2020.
Let’s dive in!
Employee or Independent Contractor?
Assembly Bill 5 (also called AB 5) might be one of the most significant impacts on the market. As it comes into full power, employers will have to review their workers and may have to re-classify them.
Employers who fail to re-classify their employees will have consequences from the responsible jurisdictions.
The main takeaway of the AB 5 is to separate what it means to be a worker for the company. Some companies use independent contractors for their business, but with the new law, they might legally become employees.
The status of an independent contractor can remain if the employer can prove the worker’s performance is in no way directed or controlled by the hiring entity.
Or, if the person’s working on a project that doesn’t come under the usual scope of the company’s activity.
One of the main factors determining if the worker is an independent contractor is to see how much control the employer has over his performance.
This means that if the worker has to stick to rules and regulations that other employees do, it’s most likely such an independent contractor needs to be reclassified.
Other Things to Consider
Secondary factors to defining the contractor might be whether they buy their own materials and tools, work according to personal schedule, have employees under him or works on set goals and projects, rather than indefinitely.
The AB 5 will be of utmost importance to companies who mostly hire independent contractors. The new California laws might require the business to reclassify and restructure its business model.
The law doesn’t automatically change the status of the employee; the employer will have to review their business manually.
Discrimination Amendments
Senate Bill 188 (SB 188) extends the Fair Employment and Housing Act to include additions in appearance.
This amendment was prompted by discrimination for “traits historically associated with race.” This mostly encompasses hair texture and hairstyles.
Simply put, the worker cannot be discriminated against for their hair. This includes being passed on for promotions, getting hired, and other instances.
Under Californian laws, employers are advised to review their policies, especially the dress code related ones, to make sure there’s no unacceptable or opposing language in it.
Additionally, AB 9 extends the time the employee has to file a complaint about unlawful practices.
If the employee has been harassed or discriminated against, he now has three years from the day the infringement happened to report it to the Department of Fair Employment and Housing.
Employers should retain the documents related to their employees for no less than three years. Workplace regulations should be amended to reflect the change.
Wages and Working Time
AB 673 allows the employee to seek remedies if they haven’t been paid. An employee can file a private action to recover statutory penalties from the employer. Or they can enforce civil penalties based on the Private Attorneys General Act. An employee may only pursue one of the options.
If the employee is paid, but it’s unfair to the work they did, they may use SB 688. This amendment states that if an employer paid their workers less than contractually obligated, even if the payment exceeds the minimum wage, the Labor Commissioner can demand the employer pay the missing wages. The employer retains the right to contest these citations.
The minimum wage also changes. Under new California laws, if a company has less than 25 people working for it, the minimum wage is increased to $12.00 per hour.
If a company has more than 26 employees, their minimum wage will be $13.00 per hour.
Employees who fall under white-collar exemptions (those working in administrative, managerial, executive, or professional roles) will receive changes to the minimum annual salary.
An exempt employee will receive no less than $49,920 if the company has 25 or fewer employees, and $54,080 if more than 26 people are working in the company.
Workplace Accommodation
California laws also expand on maternity issues. SB 142 implements the need for a location where the employee can express breast milk. The so-called lactation room cannot be a bathroom.
The employer needs to set up a new location that is safe, clean, and without toxic or hazardous materials. The room also needs to be close to the employee’s work area and protected from view.
The room needs to have a flat surface for personal items and the pump. The employee should also have someplace to sit.
There should be a sink and a fridge too. Additionally, the employee should have break times when they need to use the lactation room. And these breaks cannot infringe upon the employee’s existing break time.
If the employer operates in a building with several other businesses, they might cooperate to create a commonly used lactation room. For this, the employer would have to prove that the room cannot be installed near the employee’s workspace.
Critical Changes in California Laws
We have discussed several of the more prominent changes that the employers will have to adjust to.
First, they will need to review their relationships with the employees and independent contractors. Many businesses should consider adjustments and re-classification to stay on the right side of the law.
Second, there are changes to the minimum wage. It increased to $12 and $13, depending on the employee count. Many cities plan to improve the state number in 2020 by their own volition. The employer will also be liable for missed wages or wrong payments.
Third, the discrimination policies should be adjusted to reflect the changes in California laws.
Hairstyles are not the basis to hold prejudice against people. Employees with newborns should be allowed to use a lactation room, designed specifically for the purpose. The company’s policy should also reflect these changes.
These are but several of the significant changes.
If you want to get more information on the issue, contact us today!
