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California Legislature Passes New Employment Statutes

The California Legislature passed several bills recently that should be of interest to Bay Area businesses. Some of these bills are still awaiting the governor’s signature, while others have been signed and will take effect on January 1, 2016. The new laws deal with numerous issues affecting California employers, including employment discrimination, arbitration clauses in employment contracts, gender pay equity, and immigration.

SB 432, signed by Governor Brown on August 10, 2015, eliminates the term “alien” from the California Labor Code. The law repeals § 1725, which defines “alien” as any individual who is not a citizen of the United States through birth or naturalization; and § 2015, which states that “aliens” receive the lowest preference for employment in public works after citizens of California and citizens of other U.S. states. The bill’s sponsor, Senator Tony Mendoza (D-Artesia), describes the term as “outdated and derogatory.”

The governor has also signed AB 987, which amends the California Fair Employment and Housing Act (FEHA), Cal. Gov’t Code § 12900 et seq., to protect employees who request a reasonable accommodation related to disability or religion. The bill originated as a response to a state appellate court decision that held that “a mere request — or even repeated requests — for an accommodation, without more” was not protected under FEHA. Rope v. Auto-Chlor System of Wash., Inc., 220 Cal.App.4th 635, 652 (Cal. App. 2d 2013). The bill amends § 12940 of the Government Code to add subsections (l)(4) and (m)(2), which prohibit employers from discriminating or retaliating against an employee for requesting an accommodation based on a disability or a religious belief or practice.

SB 358, which is still awaiting the governor’s signature, would require equal pay for male and female employees “for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” Cal. Lab. Code § 1197.5(a). Current law states that wage differentials are permissible if they are based on systems of merit, seniority, “quantity or quality of production,” or any “bona fide factor other than sex.” Id. The bill would amend this provision of the Labor Code by expanding on the “bona fide factor” language, stating that employers must apply these factors “reasonably” and stating that one or more of the listed factors must account for an employer’s “entire wage differential.”

A bill to ban mandatory arbitration agreements in employment statutes, AB 465, is also waiting for action by the governor. A wide range of contracts include provisions for mandatory arbitration of disputes. In an arbitration, a form of alternative dispute resolution, the parties to a dispute present their case to a privately retained and certified arbitrator, who will conduct a proceeding that is similar to a trial. A contract may state that an arbitrator’s decision is binding or non-binding. AB 465 would amend the Labor Code to state that employers may not require employees to agree to mandatory arbitration in an employment contract, since this would be a waiver of legal rights that is against public policy.

Cirrus Law PC has advocated for the rights of Bay Area businesses and business owners for more than 38 years. Our practice covers a wide range of litigation and transactional matters. To schedule an initial confidential consultation with a knowledgeable and skilled advocate, contact us today online or at (925) 463-1073.

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