New 2016 Employment Laws

New and Updated Employment Laws in 2016

For most of us, ringing in a new year means party hats, noisemakers, and lists of resolutions that are more than likely doomed to failure. For California employers, the New Year also means something else-the start of new and updated employment legislation. Several bills went into effect on January 1, 2016 that employers should be aware of, including a minimum wage increase and amendments to the equal pay act. Here are just some of the new laws affecting employers:

• Minimum Wage Increase: As of January 1, 2016, California’s minimum wage increased to $10.00 per hour. The hourly increase naturally will also mean an increase in overtime and double pay for minimum wage employees.

o Equal Pay Act Amendments: With the passage of Senate Bill 358, California now has one of the strongest equal pay laws in the country. SB 358 amends Labor Code section 1197.5, essentially broadening the scope of what pay needs to be equal, and making it easier for an employee to prove a claim of unequal pay based on gender. The amendment to Labor Code section 1197.5 eliminates the “same establishment” requirement, and replaces it with a new standard: an employer is now prohibited from paying any of its employees at wage rates less than those paid to employees of the opposite sex for “substantially similar work.” Whether work is substantially similar is determined by considering a composite of skill, effort, and responsibility, as well as whether the work is performed under similar working conditions
o The previous version of section 1197.5 contained exceptions that allowed for unequal pay, including merit and seniority. Under SB 385, an employer must now affirmatively demonstrate that a wage differential is based on one or more of these four enumerated exceptions: (1) a seniority system; (2) a merit system; (3) a system that measures earnings by quantity or quality of production; (4) a bona fide factor other than sex, such as education, training, or experience. The bona fide exception is only applicable if the employer demonstrates that the factor is not gender-based, is job related with respect to the position in question, and is consistent with business necessity. However, the bona fide exception will not apply if the employee can demonstrate that an alternative business practice exists that would serve the same purpose without the wage differential.
o The amendment prohibits an employer from retaliating against an employee for exercising his or her rights under this legislation. It also allows an employee to disclose the amount of his or her wages and inquire about and discuss the wages of others without reprisal. SB 385 also requires employers to keep records of wages, wage rates, job classifications, and other terms and conditions of employment for three years. This is an increase from the previous two years.

• Personal Liability for Wage Violations: With the enactment of SB 588, employers or persons acting on behalf of an employer, including an owner, director, officer, or managing agent may be held liable for violating Labor Code provisions, including those related to the minimum wage or hours and days of work in any Wage Order.

Authored by Amanda L. Iler, [email protected], February 2106
Supervising Attorney, Carl Fessenden, [email protected].