Hunton Employment & Labor Perspectives

California’s governor signed into law SB 988, which is known as the “Freelance Worker Protection Act.”  SB 988 establishes new contractual protections for freelance workers starting January 1, 2025.

Business and labor groups in California have reached a tentative legislative deal to preserve—but reform—the State’s much criticized law known formally as the California Labor Code Private Attorneys General Act of 2004, Cal. Lab. Code § 2698, et seq. (“PAGA”).  Governor Gavin Newsom announced the deal on Tuesday.

Employers contemplating a forced transfer of a worker will need to grapple with a new standard set out by the US Supreme Court under Title VII of the Civil Rights Act of 1964, the law that makes it unlawful to discriminate against workers based on various protected characteristics. The Supreme Court in Muldrow v. City of St. Louis issued an important ruling that clarifies the evidentiary standard employees must meet when asserting a discriminatory transfer claim against an employer under Title VII.   Prior to the Court’s decision, there was a Circuit split with most courts holding that an employee had to show a significant employment disadvantage to prevail on a claim that their transfer violated Title VII.  In its opinion, the Supreme Court held instead that an employee must show (i) the employer’s action was discriminatory, and (ii) that the employee suffered “some harm” respecting an “identifiable term or condition of employment” to state a claim for discrimination under Title VII.  The majority noted that the Court’s “some harm” standard is a downward departure from the type of evidence that lower courts had traditionally required to show discrimination under Title VII – namely, that an employee must suffer “significant,” “material,” or “serious” harm to have an actionable claim. 

California law requires employers with at least 100 employees and at least one California employee, to annually report pay, demographic, and other workforce data to the Civil Rights Department (“CRD”). This reporting is required under Government Code section 12999, and is part of the State’s efforts to promote equal pay. 

The U.S. Supreme Court in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College decided that the race-based admissions programs at Harvard College and the University of North Carolina (the “Schools”) violated the Equal Protection Clause of the Fourteenth Amendment. While the Court answered the question for publicly funded schools, it is an open question whether, and how, the Court’s decision will impact affirmative action and diversity programs for private employers, as discussed in more detail below.

On March 31, 2023, Los Angeles County’s COVID-19 emergency proclamation and orders that have been in place since March 2020, will officially end.  The Los Angeles County Board of Supervisors made this unanimous decision on February 28, 2023, in light of the recent progress in the COVID-19 pandemic.  The official end of Los Angeles County’s COVID-19 emergency will directly impact the status of employee COVID-19 Supplemental Paid Sick Leave and Paid Vaccine Leave, both of which expire on April 14, 2023.

Last week, the Ninth Circuit issued a decision holding that California employers can require employees to enter into mandatory arbitration agreements as a condition of their employment.  In the decision, Chamber of Commerce v. Bonta, No. 20-15291 (9th Cir., Feb. 15 2023), a three-judge panel reversed the Ninth Circuit’s own prior decision and found that Assembly Bill 51 (AB 51), which sought to impose criminal and civil penalties on employers who require employees to enter into such agreements, is preempted by federal law.

San Francisco has significantly expanded its Family Friendly Workplace Ordinance to guarantee flexible or predictable work arrangements for employees with qualifying caregiver responsibilities when the employee provides notice of their preferred arrangement, unless the employer can demonstrate an undue hardship to the employer.

Over the course of the pandemic, California employers have contended with rapidly changing rules on workplace safety. Mask requirements in the workplace have been an especially evolving area, where the rules have not only varied between the federal, state, and local jurisdictions, but were often inconsistent across different state agencies. California has now taken steps, however, to align the state’s new mask mandates for the public as well as in the workplace.

In a bipartisan vote, Congress passed a new law poised to end employers’ ability to require employees to arbitrate claims for sexual harassment or sexual assault through a pre-dispute arbitration agreement.  This new law is the latest in an ongoing series of state and federal laws inspired by the #MeToo movement, and the most significant federal legislation involving the issue of arbitration in recent years.

On February 9, 2022, California Governor Gavin Newsom signed into law Senate Bill 114, which reestablishes the state’s COVID-19 supplemental paid sick leave requirements. Employers will not be able to simply dust off their 2021 policies and reimplement them, however, because the 2022 law contains some important changes from prior laws.

On December 27, 2021, the Center for Disease Control and Prevention (CDC) updated their isolation and quarantine recommendations for the general public, including more limited time periods for quarantine and isolation periods.  On December 30, 2021, the California Department of Public Health (CDPH) released updated guidance to conform to the new CDC guidelines but added additional requirements, including testing to exit isolation or quarantine after the fifth day (which the CDC now acknowledges is the “best approach” but does not require as part of its formal guidance).  Notably, the new guidance also introduces a distinction between boosted and non-boosted individuals for the first time.  The key requirements and takeaways from this new guidance are detailed below.

The United States Supreme Court has agreed to take a closer look at the enforceability of arbitration agreements that bar representative claims brought under PAGA, a California law that allows individual employees to police labor code violations.

A California appellate court recently upended a representative PAGA and class action settlement because the named plaintiff did not exhaust administrative remedies under PAGA because he failed to identify each separate theory of liability.

California employers will need to reconsider the way they calculate premium payments for meal and rest break violations following a recent decision of the California Supreme Court.

Beginning June 15, 2021, Governor Newsom moved forward with his plan to lift public health restrictions on businesses, including capacity limitations, physical distancing, and face coverings.  In response, Cal/OSHA also has issued new workplace standards for COVID-19 prevention.

While California inches closer to the state’s June 15 target to lift restrictions and reopen the economy, California employers will have to wait for guidance from CalOSHA on the standards that will govern COVID-19 workplace safety.  For now, CalOSHA’s Emergency Temporary Standards released in November 2020 will remain in place and employers will need to continue to be mindful of these more restrictive guidelines, despite loosening of other state restrictions.

Employers with more than 25 employees must provide COVID-19 supplemental paid sick leave to their California employees under a recent law signed by the Governor.  This new law is broader than California’s prior COVID-19 paid sick leave law and, unlike the prior law, also covers employees who telework. The new sick leave entitlement is retroactive to January 1, 2021 and extends until September 30, 2021.

Who Must Provide Supplemental Paid Sick Leave?

SB 95 covers all employers with more than 25 employees. California’s prior COVID-19 sick leave law (Assembly Bill 1867) expired on December 31, 2020, and applied only to private businesses with 500 or more employees.

Closures of schools and day care centers during the COVID-19 pandemic have put heightened focus on the child care challenges faced by working parents.  The California legislature is aiming to address these challenges by introducing a bill that, if passed, would require employers to provide subsidized backup child care benefits to employees. While this may help working parents, it also would place additional burdens on employers, many of whom are already over-taxed by the increased costs and depressed revenues caused by the pandemic.

Many employers use rounding methods to adjust the hours that an employee works to the nearest time increment, such as every five or ten minutes.  The California Supreme Court has ruled, however, that this rounding practice is impermissible at the meal period.  Equally as troubling for employers, the Court also held that time records showing a noncompliant meal period raise a “rebuttable presumption” of meal period violations.

A bill recently signed into law in California will require private employers to submit annual “pay data reports” to the Department of Fair Employment and Housing (“DFEH”) beginning in March 2021. The California law implements a previously announced program rolled back by the Trump administration to expand federal reporting requirements to include employee pay data by race, gender, and ethnicity.

Beginning in January, an expanded California leave law will require employers with as few as five employees to provide up to 12 weeks of unpaid medical and family leave each year.  For larger employers also covered by the FMLA, the California leave may be in addition to the 12 weeks of leave that employers already must provide under federal law, for a potential total of up to six-months of leave.

California recently enacted Assembly Bill 1867, requiring all private employers with 500 or more employees to provide COVID-19 supplemental paid sick leave for their California employees.  Employers must begin providing supplemental sick leave, under the new law, no later than September 19, 2020.  The law will remain in effect until the later of December 31, 2020 or expiration of any federal extension of the Families First Coronavirus Response Act.

Los Angeles Mayor Gil Garcetti signed into law two new ordinances that affect certain employers in the following commercial sectors: airport businesses, commercial property businesses, event center businesses, and hotel businesses.  These ordinances give recall rights and impose obligations on employers upon a change in ownership.

City of LA’s first ordinance, known as the Right of Recall, requires covered employers to offer laid off workers new positions that become available.  The second ordinance, known as the Worker Retention Ordinance, requires covered employers of a business that has had a change in ownership to rehire workers who were employed by the prior business employer.

As states have worked to process the millions of unemployment claims arising out of the pandemic, many questions have arisen about who is eligible for the federal Pandemic Unemployment Assistance (PUA) benefit under the CARES Act.  The Department of Labor’s most recent guidance attempts to answer many of these questions posed by the states and may be helpful to employers considering furloughs or layoffs.

In recent weeks, the states have begun to announce strategies for reopening public life and business activities. Just as the shutdown orders took varying forms on a state-by-state basis, it appears the reopening orders will follow a similarly varied and state-by-state approach, creating new challenges for multi-state employers.  However, there are some trends starting to emerge that may help employers piece together a cohesive strategy for bringing their employees safely back to work.

On April 16, 2020, Governor Gavin Newsom issued Executive Order N-51-20, which requires California employers in the food sector industry to provide certain workers affected by the COVID-19 pandemic with up to 80 hours of supplemental paid sick leave.

Los Angeles (LA) Mayor Eric Garcetti has issued an emergency order modifying the City’s recently passed COVID-19 supplemental paid sick leave requirements.  The prior ordinance, adopted on March 27, 2020, by the LA City Council, had required LA employers with 500 + employees nationally, to provide up to 80 hours of supplemental paid sick leave.  In a nod to the instrumental role employers will play in the City’s revival in the aftermath of the coronavirus crisis, Mayor Garcetti modified the paid leave requirements in a number of key ways.

We previously wrote about the San Diego County face-covering mandate. On April 7, 2020, the City of Los Angeles joined San Diego County and issued an Order (the “Order”) that requires certain workers to wear cloth face coverings. Notably, the Order is more expansive than San Diego County’s face-covering mandate because it covers workers in more occupations, applies to customers and visitors of certain businesses, provides face-covering maintenance requirements, and requires certain employers to furnish face coverings and other sanitary products.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020 as a federal response to the economic crisis caused by the Coronavirus. As we previously reported, the Act greatly expands unemployment benefits for workers affected by the COVID-19 pandemic, but many questions remained about how the Act would be applied.  The DOL recently issued guidance answering some of these questions.

The California Public Health Department issued Guidance recommending that all Californians wear cloth face coverings when in public for essential activities.  San Diego County took that guidance one step further, however, and issued an addendum to its public health order, requiring that certain employees wear cloth face coverings.  The San Diego order also requires covered businesses to follow new posting guidelines, and recommends that all San Diegans heed California’s Statewide Face Coverings Guidance.

In the face of unprecedented challenges due to COVID-19, employers have been forced to balance the need to mitigate current health risks against the need to protect their future financial viability.  Last week, the Los Angeles City Council made navigating that balance more difficult for some employers.

Employers in California continue to grapple with how to interpret Governor Gavin Newsom’s Executive Order directing all California residents to stay home, except as needed “to maintain the continuity of operations of the federal government critical infrastructure sectors.”  Since the Order came out, the state has issued and updated its list of “Essential Critical Infrastructure Workers” who are exempted from the stay-at-home restrictions for purposes of reporting to work.

COVID-19 presents an array of new challenges and an abundance of uncertainty for employers. Notable among them, is the possibility that communities and states will begin to issue mandatory business closures and shelter in place orders. Interpreting and complying with these orders raises a host of issues for employers to consider.

Yesterday, Governor Newsom issued an Executive Order mandating that all California residents remain at home, except those needed to maintain continuity of operations of the federal critical infrastructure sectors.  The Order is open ended and will continue to be in place until the Governor orders otherwise.

What does this mean for California businesses?

In response to the COVID-19 pandemic and in an effort to prevent the spread of the virus, many employers are grappling with the need to immediately shut down operations.  This raises the question whether employers must pay out all wages (including paid time off) when employees are temporarily laid off or furloughed. In California, they might.

No doubt recognizing the unprecedented impact on business, Governor Gavin Newsom issued an Executive Order suspending the notice requirements under the California Worker Adjustment and Retraining Notification Act (WARN Act), Cal. Lab. Code §§ 1401(a), 1402, 1403. The Executive Order suspends existing law that could have otherwise required employers to provide 60 days’ notice before instituting mass layoffs, relocations, or terminations, and could potentially have imposed steep penalties on employers who failed to do so.  Certain notice obligations remain, however, under the Executive Order.

Employers in the difficult position of making workplace reductions because of COVID-19-related business losses should spare a moment for consideration of layoff notice obligations under the federal Worker Adjustment Retraining Notification Act of 1988, 29 U.S.C. § 2100 et seq. (“WARN”) and its state counterparts (so-called “mini-WARN” laws). The “unforeseen business circumstances” exception in federal WARN and most analogous state laws may excuse strict compliance with notification requirements, but employers should take the time now to analyze the applicability of this exception rather than make assumptions about it.

As the national response to COVID-19 intensifies, states and localities across the country have announced school closures.  Employers should review their state and local laws to determine whether such closings may trigger an employee’s right to take job-protected, or paid leave.

State and Local Leave Allowances for School Closings

Many states have laws that require employers to offer employees paid sick leave. In each state, there are different qualifying reasons that entitle employees to take this leave.  What employers may not realize, is that some states require that employees be allowed to use paid sick leave during certain school closing scenarios.  In at least seven states, school closings caused by a public health emergency are a qualifying reason to take paid sick leave.  Those states are Arizona, Michigan, New Jersey, Oregon, Rhode Island, Vermont and Washington.

Under California law, an employee’s prior salary cannot be used to justify a pay disparity.  Now, the same is true under federal law – at least in the Ninth Circuit.

In Rizo v. Yovino, the Ninth Circuit recently ruled that an employee’s prior pay history is not a “factor other than sex” that can justify a pay gap under the Federal Equal Pay Act (“EPA”).  This outcome may not surprise employers in California, where state law expressly prohibits using prior salary as a basis for a pay disparity.  But unlike California’s statute, the federal law does not directly prohibit consideration of prior pay.  Rather, the Ninth Circuit looked beyond the plain language of the statute and examined the purpose of the “catch-all” exception, which permits pay differentials based on “any factor other than sex.” The Court concluded that this broadly worded exception “comprises only job-related factors.”

On Thursday, the California Supreme Court ruled that employees must be paid for time spent undergoing security checks before leaving work.

Earlier today, Eastern District of California Judge Kimberly Mueller granted a preliminary injunction, prohibiting the state of California from enforcing AB 51, which sought to prohibit companies in California from requiring arbitration agreements as a condition of employment.

AB 51 originally was set to go into effect on January 1, 2020, but the Court granted a motion for temporary restraining order brought by a coalition of business groups, that temporarily prohibited the law’s enforcement through January 31, 2020.  In the interim, the Court considered more fulsome ...

With the new year comes newly-enacted laws in California. Governor Gavin Newsom signed several new laws during the last legislative session, which went into effect January 1, 2020. Is your company ready for these changes?

California’s law against arbitration remains in doubt after Eastern District Judge Kimberly Mueller extended the TRO issued on December 31, prohibiting the state of California from enforcing the law against agreements covered by the Federal Arbitration Act.  That law, known as AB 51, seeks to prohibit companies in California from requiring arbitration agreements as a condition of employment.

Earlier today, District Judge Kimberly J. Mueller of the United States District Court for the Eastern District of California, granted a temporary restraining order that temporarily prohibits the state of California from enforcing AB 51, a law that would prohibit companies in California from requiring arbitration agreements as a condition of employment.

You can read more about AB51 here and here.

Yesterday, the California Supreme Court issued its highly-anticipated decision in ZB, N.A. v. Superior Court bringing some welcomed good news for California employers.   The case concerned an action brought under the Private Attorneys General Act, wherein the representative employee was seeking, among other things, lost wages under Labor Code Section 558.  The question presented was whether the employee’s claim for lost wages under Labor Code Section 558 could be broken off and sent to arbitration on an individual basis, while the remainder of the PAGA action for civil penalties proceeded in court.  As discussed in a previous post, California courts were split on this issue.

The Ninth Circuit Court of Appeals upheld a District Court’s ruling in favor of employer Medtronic, Inc. in a lawsuit alleging Medtronic unlawfully terminated employee Jose Valtierra’s employment because he was morbidly obese, in violation of the Americans with Disabilities Act (“ADA”).  In doing so, the Court declined to decide whether morbid obesity is a disability, leaving this issue unsettled in the Ninth Circuit.

California employment laws are constantly evolving, making it a challenge for companies doing business in the Golden State to keep up with recent developments and remain compliant. View this complimentary video where Hunton Andrews Kurth partners Emily Burkhardt Vicente and Amber Rogers discuss “Five Recent Developments in California Employment Law You May Have Missed.”

In a recent decision, the California Supreme Court refused to overturn an arbitrator’s award, despite finding the award was incorrect.  Specifically, the Court held that an arbitrator should have considered evidence of a rejected section 998 settlement offer and changed its cost award, even after issuing a final arbitration decision.  However, the Supreme Court determined a trial court does not have authority to correct this error. The ruling emphasized the broad scope of an arbitrator’s powers and narrow scope of judicial review when the parties choose arbitration.

Heimlich v. Shivji involved a dispute over legal fees between an inventor and his attorney.  The representation agreement contained an arbitration clause and during arbitration each party asserted claims for money owed.  

California has long been considered one of the most – if not the most – protective states of employee rights.  This continues to ring true, as the legislature has proposed another law aimed at prohibiting employers from requiring employees to sign mandatory arbitration agreements as a condition of employment.   In essence, Assembly Bill 51 (AB 51), would prevent employers from requiring their employees to bring all employment related claims, including discrimination, harassment, retaliation, and wage and hour claims, in arbitration instead of state or federal court.

The California Second Appellate District has held that retail employees who were required to “call in” two hours before their scheduled shift to find out if they actually needed to report to work were entitled to reporting time pay. The Court held that California retail employees do not need to physically appear at the workplace in order to “report for work,” and be entitled to reporting time pay, under the Industrial Welfare Commission (“IWC”) Wage Order 7.  Given the robust dissent and sweeping change this decision could bring about, this is a case to watch as it may find its way to the California Supreme Court.

What are newly elected Governor Gavin Newsom’s views on #MeToo legislation, and how do they compare to those of his predecessor, Jerry Brown?  We may soon have answers to these questions thanks to a pair of bills introduced by Assemblywoman Lorena Gonzalez (D-San Diego), which reintroduce harassment-related proposals vetoed by Governor Brown.

In the recent election, Californians voted to add an employer-friendly provision to the Labor Code that allows emergency ambulance workers to be on-call during breaks.  California is one of 24 states that allow voters to initiate laws through the petition process.

Sexual harassment is a recurring theme in the bills signed into law by California Governor Jerry Brown on September 30, 2018.  These new laws, which take effect on January 1, 2019, continue the trend of expanding protections for California employees.

 Hush-Money – Three of the bills signed by Governor Brown on September 30 target settlement agreements that prohibit disclosure of sexual harassment claims. AB 3109 makes void and unenforceable any provision in a contract or settlement agreement that waives a party’s right to testify in an administrative, legislative, or judicial proceeding concerning alleged criminal conduct or sexual harassment.  SB 820 prohibits settlement agreements from including a provision that prevents the disclosure of factual information related to claims of sexual assault and sexual harassment.  However, this bill does not prohibit confidentiality of the settlement amount.  SB 1300 voids any agreement in which an employee forfeits his or her right to disclose unlawful acts in the workplace, including acts of sexual harassment.

Redefining The Hostile Work Environment Standard – SB 1300 also declares that a single incident of harassing conduct could be sufficient to create a triable issue regarding the existence of a hostile work environment in certain circumstances.

Employers who operate in New York State and City are likely aware of the new sexual harassment laws that are starting to take effect.  Many companies have already revised their sexual harassment policies to comply with the new laws, but now face the hurdle of complying with the sexual harassment training requirements under both the State and City laws.

While there is overlap between the State and City requirements, there are differences that employers should note.

The California Supreme Court has ruled that California employers cannot rely on the federal de minimis doctrine to avoid claims for unpaid wages on small amounts of time.   Under the de minimis doctrine, employers may be excused from paying workers for small amounts of otherwise compensable time if the work is irregular and administratively difficult to record.  Federal Courts have frequently found that daily periods of approximately 10 minutes are de minimis even though otherwise compensable.

In Troester v. Starbucks Corporation, the California Supreme Court held that California wage and hour laws have not adopted the FLSA’s de minimis doctrine.  As a result, Starbucks was not permitted to avoid paying an employee who regularly spent several minutes per shift working off-the-clock.  The Supreme Court acknowledged, however, that there may be circumstances involving “employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.”

New regulations addressing national origin discrimination under California’s Fair Employment and Housing Act (FEHA) go into effect on July 1, 2018 – are you ready?  The regulations expand the definition of “national origin,” make language restrictions presumptively unlawful, and limit an employer’s ability to verify immigration status, among other significant changes.

In a time when workplace violence seems to be on the rise, many companies have adopted a strict no tolerance policy even for conduct outside the workplace.  In California, however, employers need to be cognizant of the protections afforded individuals that may make such terminations riskier than the company may expect.  One employer got just such a reminder last week when a California jury returned an $18M verdict against it for terminating an employee after he was arrested for threatening his girlfriend outside of the workplace.

When a franchisor provides a California franchisee with detailed instructions about how to operate the franchise business, but allows the franchisee to manage its own workforce, can the franchisor be held liable for the franchisee’s wage and hour violations?  The California Court of Appeals found the answer to be no under the facts in Curry v. Equilon Enterprises, LLC, 2018 WL 1959472 (Cal. Ct. App. Apr. 26, 2018).  There, the Court of Appeals concluded Equilon Enterprises, LLC, doing business as Shell Oil Products US (“Shell”), was not liable for the alleged wage and hour violations of the company that operated its Shell-branded gas stations throughout California.

The California Supreme Court has adopted a new three-part test to determine whether a worker is an independent contractor or an employee under California’s wage orders, which regulate wages, hours, and working conditions.  The highly anticipated ruling could have wide ranging effects for businesses operating in California and beyond, as companies try to navigate the new gig economy.

The California Supreme Court issued a decision Monday in a case that is sure to cause headaches for employers when compensating employees through flat sum bonuses.  In Alvarado v. Dart Container Corporation of California (S232607) the Court held that for purposes of calculating the regular rate, a flat sum bonus is to be allocated only to the nonovertime hours worked. This holding departs from the calculation methods broadly considered compliant outside of California under the Fair Labor Standards Act (“FLSA”) and regulations issued by the U.S. Department of Labor.

The new year brings new laws for California employers to grapple with. Below we highlight the most significant new employment laws affecting California employers as of January 1, 2018.  Companies based in California or with operations in California are encouraged to review their policies and procedures in light of these developments.

On Friday, January 5, 2018, the U.S. Department of Labor (“DOL”) posted a brief statement and updated its Fact Sheet on Internship Programs Under the Fair Labor Standards Act to clarify that going forward, it will use the “primary beneficiary” seven factor test for distinguishing bona fide interns from employees under the FLSA.  The DOL’s approach is consistent with the test adopted by appellate courts such as the Second and Ninth Circuits.

Imagine that you are a company with two openings for the same position.  After selecting the two most qualified candidates, you offer each candidate a salary equal to his or her prior salary, plus 5%, pursuant to your established policy for setting new hire salaries.  On its face, your policy has nothing to do with sex, but does it violate the Federal Equal Pay Act?  This was the issue addressed by the Ninth Circuit Court of Appeals in the recent decision Rizo v. Yovino, No. 16-15372, slip op. at 11–12 (9th Cir. Apr. 27, 2017).

Beginning next week, on March 13, 2017, San Jose employers must offer existing part-time employees additional work hours before hiring any temporary, part-time, or new worker. This is a result of a vote last fall by voters in San Jose, California who approved “The Opportunity to Work Ordinance” (Ordinance No. 2016.1, codified at Chapter 4.101 of the San Jose Municipal Code) – a local measure that directs employee hours and hiring practices.

San Jose’s Office of Equality Assurance, the local agency tasked with monitoring, investigating, and enforcing the Ordinance, recently issued its Opportunity to Work FAQs, which provides additional guidance on how employers can comply with the new ordinance.  Following more comprehensive scheduling ordinances passed in San Francisco and Emeryville last year, San Jose is the third northern California city to enact a scheduling ordinance.

One month into 2017 and new pay equity laws already are springing up.  Philadelphia is now the first city to prohibit employers from using pay history information in making employment decisions.  New York Governor Andrew Cuomo has issued executive orders mandating that: (1) agreements entered into by the state require contractors to report their employees’ pay information; and (2) state agencies can no longer use candidates’ current or prior pay in making employment decisions.  Likewise, the Mayor of New Orleans has now issued an executive order prohibiting city departments from asking job applicants about salary history and requesting a study of pay disparity among city employees.

When it comes to employee wage equality, California already has one of the most expansive laws in the country, and it is now attempting to go even further. On June 23, the Wage Equality Act of 2016 (“Wage Equality Act”), SB 1063, took one step closer to becoming law as it passed the California State Assembly’s Committee on Labor and Employment. The bill seeks to extend the protections of the California Fair Pay Act, which prohibits pay disparity based on sex for substantially similar work, to also prohibit such disparities based on race or ethnicity. Already approved by the State Senate on May 31, 2016, the Wage Equality Act will now be heard in the Assembly’s Appropriations Committee in August after which, assuming it passes, it will make its way to the Assembly floor. If California’s Wage Equality Act is enacted, it will likely create the strongest wage equality law in the United States.

With its May 26 Lewis v. Epic-Systems Corp. decision, the Seventh Circuit became the first circuit to back the reasoning in D.R. Horton, Inc., 357 NLRB No. 184 (2012), and held that a mandatory arbitration agreement prohibiting employees from bringing class or collective actions against their employer violates the National Labor Relations Act (NLRA). This decision creates a circuit split regarding the enforceability of arbitration agreements with class action waivers in the employment context, and the issue is now ripe for potential Supreme Court review.

Today, the U.S. Department of Labor published its final rule increasing the salary requirement for the Fair Labor Standards Act’s white-collar exemptions to $47,476 per year ($913 per week). Though the new salary level is not as high as the $50,440 per year level predicted by the DOL in its July 2015 proposed rule, the final rule nonetheless more than doubles the current salary requirement of $23,660 per year ($455 per week). The reason the salary requirement is somewhat lower than initially predicted is that the final rule applies the proposed 40% threshold to the average full-time salary compensation paid in the lowest-wage Census region, as opposed to applying the 40% threshold to the national salary average.

Last Monday, the California Supreme Court in Kilby v. CVS Pharmacy, Inc. clarified the meaning of California’s requirement that all working employees be provided with suitable seating “when the nature of the work reasonably permits the use of seats.” Answering three questions raised by the Ninth Circuit, the Court ruled that:

(1) The “nature of the work” refers to an employee’s tasks performed at a given location for which a right to a suitable seat is claimed, rather than a “holistic” consideration of the entire range of an employee’s duties anywhere on the jobsite during a complete shift. If the tasks being performed at a given location reasonably permit sitting, and provision of a seat would not interfere with performance of any other tasks that may require standing, a seat is called for;

(2) Whether the nature of the work reasonably permits sitting is a question to be determined objectively based on the totality of the circumstances. An employer’s business judgment and the physical layout of the workplace are relevant but not dispositive factors. The inquiry focuses on the nature of the work, not an individual employee’s characteristics; and

(3) The nature of the work aside, if an employer argues there is no suitable seat available, the burden is on the employer to prove unavailability.

Over the weekend, California Governor Jerry Brown vetoed a bill aimed at prohibiting mandatory employment arbitration agreements as a condition of employment.  The bill also would have made it unlawful for an employer to discriminate or retaliate against an employee who refused to sign an arbitration agreement.  The Governor’s veto marks a victory for the dozens of business associations (and California employers) that opposed the bill.

On Friday October 2, 2015, Governor Jerry Brown signed AB 1506 into law, amending California’s Private Attorneys General Act (“PAGA”) to provide an employer the right to cure certain technical violations of the California Wage Statement Law (Labor Code § 226) before the employer can be sued.  The law sets forth specific steps that must be taken before a technical violation can be cured.

The Ninth Circuit ruled on Monday, September 28, that California Private Attorney General Act (“PAGA”) claims cannot be waived in employment arbitration agreements, following the rule announced by the California Supreme Court in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014).  With this 2-1 ruling, the Ninth Circuit majority found that the Iskanian rule barring PAGA waivers is not preempted by the Federal Arbitration Act (“FAA”).

For many employers and employees, arbitration is a quicker and less costly means of resolving employment-related disputes. As a result, it has become standard practice for many employers to require as a condition of employment that employees agree to arbitrate employment-related claims. Mandatory arbitration clauses are routinely found in employment agreements or given to employees as separate employment policies at the time of hire or during their employment.

The U.S. Supreme Court refused on Monday to take up a challenge to the California Supreme Court’s holding that California Private Attorney General Act (“PAGA”) claims cannot be waived in employment arbitration agreements containing a class action waiver.

A California appellate court recently invalidated an arbitration agreement that an employee had voluntarily entered into on the basis that it contained an unenforceable waiver of the employee’s claims under the California Private Attorneys General Act (“PAGA”) and, under the parties’ agreement, that provision could not be severed.

As is often the case, the coming new year brings a slate of new requirements for California employers to grapple with. Employers should have these developments on their radar to ensure compliance in 2015 and beyond.