2018 Labor Law Changes for CA Employers
2018 Labor Law Changes for CA Employers Granite Insurance Brokers wants to make sure 2018 goes smoothly for you. To help you navigate the various tasks and processes, we have prepared a detailed 2018 preview organized by topic. Also included is an update on Noteworthy Laws and Changes for 2018 and beyond.
Payroll and Taxes:
Mileage Reimbursement Rate for 2018
The IRS has not yet released the standard mileage rates for 2018. Rates are expected to be posted for 2018 in December of 2017.
The rate for 2017 is 53.5 cents per mile.
Local Minimum Wage and Paid Sick Leave Rates
See chart above.
Please review for rates that apply to locations where your employees work.
NOTE: Minimum wage generally applies to the location worked, not the location of the employer.
If you have employees working in areas where the minimum wage is higher than the employee’s pay rate, please contact your HR Consultant for guidance.
The minimum wage rate change affects the classification of employees as exempt vs. nonexempt. For an employee to qualify under the commonly-used administrative, executive or professional exemptions from overtime, the employee must meet the salary basis test (which means the employee’s salary must be no less than two times the state minimum wage for full-time employment) in addition to meeting all other legal requirements for the exemption.
That minimum salary rate is $45,760 annually, effective January 1, 2018, for employers with 36 or more employees.
For employers with 25 or fewer employees, the minimum salary threshold for the administrative, executive and professional exemptions is $43,680 for 2018.
Wage Notices and Posters
The minimum wage rate change affects your notice requirements:
All California employers must post the official Minimum Wage Order (MW- 2017) in a conspicuous location frequented by employees. This notice is included in Curated Compliance's All-in-One Poster.
California employers must provide each employee with a written, itemized wage statement at the time wages are paid (Labor Code Section 226). Among other mandatory information, the itemized wage statement must include all applicable hourly rates in effect during the pay period and the corresponding number of hours the employee worked at each hourly rate.
Employers in California must provide nonexempt employees with a written notice at time of hire and again within 7 calendar days after a change is made to any information in the notice (Labor Code Section 2810.5)
2018 Payroll Taxes
The maximum amount of earnings subject to the Social Security payroll tax will increase to $128,700– up by $1500 from the $127,200 in 2017. The adjustment takes effect on January 1, 2018. Employers must adjust payroll systems to account for the higher taxable wage base under the Social Security payroll tax, and should notify affected employees that more of their paychecks will be subject to payroll withholding.
Earned Income Tax Credit
AB 1847 requires employers to notify employees of their eligibility for the Federal Earned Income Tax Credit (EITC) and/or the California Earned Income Tax Credit.
Requires employers to provide written notification to all employees that they may be eligible for the California EITC, in addition to the federal EITC.
An employer must provide this notification to employees within one week of the employer providing an employee his or her annual wage summary, including but not limited to summaries in the form of a Form 1099 or W-2.
An employer must provide this notification by handing it directly to the employee or mailing it to the employee’s last known address. An employer will not be considered to have satisfied these requirements by posting a notice or sending through office mail. However, AB 1847 encourages these methods in addition to the required methods mentioned above.
Pension Plan Limits for Tax Year 2018
The limits for retirement plans for 2018 are as follows:
Clients should review employee deductions for YTD 2017 from now until the end of the year to ensure no participants are over the IRS annual maximums.
Any adjustments or refunds must be resolved before the end of the year.
401(k) limits for 2017 are $18,000 or $24,000 for those born in 1967 or earlier.
You should have at least 3 separate postings:
- The Curated Compliance All-in-One Poster - The MPN Poster - The applicable Wage Order for your industry
If you have employees in any of the cities requiring a different minimum wage, you are also required to have those posters posted.
Depending on your city, additional postings may be required (e.g., Paid Sick Leave, Health Care Ordinance, etc.).
Please contact your HR Consultant if you have questions about postings.
California Proposition 64 Marijuana Legalization
California passed Proposition 64 in 2016, which legalizes the recreational use of marijuana in California by persons 21 and older
Despite the new law, California employers can still enforce their drug-free workplace policies and are not required to accommodate marijuana use. Our company’s policy related to drug possession, use and impairment as well as testing is not compromised with the legalization of marijuana use under Proposition 64.
Despite the passage of Proposition 64, several things will not change. For example, smoking or ingesting marijuana in public will remain unlawful, as smoking or ingesting marijuana in place where smoking tobacco is also prohibited. Similarly, driving under the influence of marijuana will remain illegal.
Proposition 64 does not disrupt the current status quo concerning workplace safety and drug prevention. Proposition 64 is not intended to interfere with these workplace policies or practices. These rights and practices aimed at maintaining a safe and drug-free workplace will continue even though marijuana is now legalized for recreational use.
Our company continues to prohibit use, possession and impairment at work, and continues to test for use when appropriate.
Our company may conduct pre-employment drug testing of all applicants before hire and deny employment if the drug test comes back positive, even if the applicant was legally using marijuana under the state’s Compassionate Use Act. Employees are reminded that impairment on the job will not be tolerated, even if the impairment was due to a morning smoke before leaving the house for work.
We will maintain a drug- and alcohol-free workplace. In other words, our policy related to drug possession, use and impairment as well as testing is not compromised with the legalization of marijuana use under Proposition 64. As a reminder, our policy bans the use, possession or sale of drugs in the workplace and on company property, and bans employees from being under the influence of an illegal or controlled substance while on the job, including alcohol or marijuana.
New California State Laws California Governor Jerry Brown recently signed into law new requirements for California employers. Below is a recap of the new laws that go into effect on 1/1/18.
Parental Leave for Small Employers
An important new law requires that small employers provide new parents with up to 12 workweeks of unpaid leave.
SB 63, the New Parent Leave Act, requires small businesses with 20 or more employees to provide eligible employees up to 12 weeks of unpaid, job-protected leave to bond with a new child — leave that must be taken within one year of the child’s birth, adoption or foster care placement. SB 63 requires employers to provide parental leave only for baby bonding; it does not require employers to provide leave for other reasons, such as a family member’s medical issue.
The New Parent Leave Act will have the greatest impact on employers with 20 to 49 employees who are not currently required to provide baby bonding leave under the federal Family and Medical Leave Act or the state California Family Rights Act. If an employee takes this leave, an employer must maintain and pay for coverage under a group health plan at the same level and conditions that coverage would have been provided if the employee had continued working.
Before the leave starts, an employer must provide the employee with a guarantee of reinstatement to the same or comparable position. Failure to provide the guarantee will be deemed a violation of the law, as if the employer refused to provide leave. Employers can be sued if they don’t comply with provisions of the Act.
AB 1008 prohibits employers with five or more employees from asking about criminal history information on job applications and from inquiring about or considering criminal history at any time before a conditional offer of employment has been made. There are limited exemptions for certain positions, such as those where a criminal background check is required by federal, state or local law.
Once an employer has made a conditional offer of employment, it may seek certain criminal history information. However, before denying employment because of a criminal conviction, these specific steps must be followed:
The employer must first conduct an individualized assessment to determinewhether the conviction has a direct and adverse relationship with the job’s specific duties that justifies denying employment.
Any preliminary decision not to hire because of a conviction history requires written notice to the applicant, who must be given the opportunity to respond. A specific timeline and process for this step must be followed. The employer must consider any information provided by the applicant before making a final decision.
Any final decision to deny employment because of the criminal conviction requiresanother specific written notice to the applicant.
No More Salary History Questions
AB 168 bans employers from asking about a job applicant’s prior salary, compensation or benefits (either directly or through an agent, such as a third-party recruiter).
In addition, employers cannot rely on salary history information as a factor in determining whether to hire the applicant or how much to pay the applicant. However, an employer may consider salary information that is voluntarily disclosed by the applicant without any prompting.
AB 168 further requires an employer to provide a job applicant, upon reasonable request, with the pay scale for the position.
Harassment Prevention Training: Gender Identity/Gender Expression, Sexual Orientation
California employers with 50 or more employees must provide supervisors with two hours of sexual harassment prevention training every two years.
Under SB 396, covered employers will have to make sure that any mandatory training course they use also discusses harassment based on gender identity, gender expression and sexual orientation.
SB 396 also requires employers to display a poster on transgender rights that the Department of Fair Employment and Housing will develop.
Harassment Prevention Training: Farm Labor Contractors
SB 295 affects the sexual harassment prevention training that must be provided to receive a farm labor contractor’s license. The bill now requires that training be conducted or interpreted into a language understood by the employee, and that the Labor Commissioner receive a list of harassment prevention training materials used and the number of individuals trained.
Gender Identification: Female, Male or Nonbinary
SB 179 will allow California residents to choose from three equally recognized gender options — female, male or nonbinary — on state-issued identification cards, birth certificates and driver’s licenses.
For changes to birth certificates, the law is effective on September 1, 2018.
For changes to driver’s licenses, the law is effective on January 1, 2019.
The bill also makes it easier for individuals to change their gender on legal documents, effective on September 1, 2018.
Employment Discrimination: Gender Neutral Language
AB 1556 revises California’s Fair Employment and Housing Act by deleting gender-specific personal pronouns in California’s anti-discrimination, anti-harassment, pregnancy disability and family/ medical leave laws by changing “he” or “she,” for example, to “the person” or “the employee.”
Fair Pay Act Expansion
AB 46 extends California’s Fair Pay Act — which prohibits wage discrimination on the basis of gender, race and ethnicity — to cover public employers; existing law only covers private employers.
Data Collection: Sexual Orientation
AB 677 requires that, beginning no later than July 1, 2019, various state labor agencies collect voluntary, self-identified information pertaining to sexual orientation and gender identity in the regular course of collecting other types of demographic data.
LGBT Rights for Long-Term Care Facility Residents
SB 219 enacts the Lesbian, Gay, Bisexual, and Transgender (LGBT) Long-Term Care Facility Residents’ Bill of Rights, strengthening anti-discrimination protections for LGBT individuals living in long-term care facilities. Among other things, SB 219 makes it unlawful to willfully and repeatedly fail to use a resident’s preferred name or pronoun or to deny admission to a long-term care facility because of gender identity or sexual orientation. Facilities are required to post a notice about the protections and follow recordkeeping requirements.
Anti-Discrimination Protections for Veterans
AB 1710 expands the current protections for members of the armed services by prohibiting discrimination in all “terms, conditions, or privileges” of employment. This legislation conforms to state law to the federal Uniformed Services Employment and Reemployment Rights Act (USERRA) by protecting service members in civilian jobs from hostile work environments.
Health Facilities: Whistleblower Protections
AB 1102 increases the maximum fine for a violation of whistleblower protections in healthcare facilities from $20,000 to $75,000.
Labor Law Enforcement, Retaliation
SB 306 allows the Labor Commissioner to investigate an employer — even without a complaint from an employee — when the Labor Commissioner suspects retaliation or discrimination against a worker during a wage claim or other investigation. The Labor Commissioner also can obtain a court order prohibiting an employer from firing or disciplining an employee, even before completing its investigation or determining retaliation has occurred. SB 306 also creates a new citation process for alleged violations and penalties.
Barbering and Cosmetology
Two new laws affect barbering and cosmetology employers and licensees. SB 490 allows workers licensed under the Barbering and Cosmetology Act to be paid a commission in addition to a base hourly rate if certain conditions are met. AB 326 requires Board of Barbering and Cosmetology schools to include information on physical and sexual assault awareness in the required health and safety course for licensees beginning July 1, 2019.
SB 258 relates to the safety of designated cleaning products, including general cleaning, air care, automotive, or polish or floor maintenance products used primarily for janitorial, industrial or domestic cleaning purposes. Provisions of SB 258 state that:
Manufacturers of the designated cleaning products must disclose the chemicals in those products and create product safety data sheets; and
Employers that have these designated cleaning products in their workplace must obtain the safety data sheets from the manufacturers and make them available at the workplace.
AB 44 requires employers to provide a nurse case manager to advocate for employees injured during the course of employment by an act of domestic terrorism, but only when the governor has declared a state of emergency. The Division of Workers’ Compensation will adopt regulations on the scope of the employer’s obligations and the contents of a required notice.
SB 189, which is effective on July 1, 2018, clarifies when owners, officers of businesses, members of boards of directors, general partners in a partnership and managing members of LLCs may be excluded from workers’ compensation laws.
AB 1422 extends the automatic stay on liens filed by medical providers who are charged with criminal fraud.
SB 489 extends the billing deadline for providers of emergency treatment services from 30 days to 180 days.
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