The California Legislature has proven once again that it can be both quick and decisive when it needs to be, even if it is at the expense of California business. By now all Employers have undoubtedly heard that Governor Brown signed legislation on April 4, 2016 which will raise the minimum wage over the next five (5) years to $15.00 per hour. Although originally introduced as far back as 2014, the original legislation had little or nothing to do with the current wage signed into law. The most recent amendment took place on March 28, 2016 and was then acted upon so swiftly that most business groups had little or no notice of the changes coming. The bill was passed on March 31 and signed by the governor on April 4 of this year.
The new law raises the minimum wage to the highest in the nation and although it contains a one (1) year deferral for small Employers (with less than 25 employees) it leaves many Employers with the unenviable task of determining whether they can remain profitable in California. Experts opine that the result will be one of several different outcomes, including: 1) an increase in the overall cost of living throughout the state to pay for the minimum wage; 2) Employers leaving the state, and/or 3) fewer jobs with more automation/mechanization also to the detriment of lower paid workers.
Whatever the ultimate outcome remains to be seen, but Employers need to be aware of the changes and act accordingly before they are caught by surprise. The distressing part, apart from the high minimum wage, is the fact that the legislature acted without giving ample time for consideration by business leaders throughout the state.
Other changes which Employers need to be aware of include the case recently decided by the California Supreme Court of Kilby v. CVS Pharmacy, Inc. which addressed issues from the Ninth Circuit Court of Appeals, and held that Employers must provide suitable seating allowing employees to sit if the job permits.
Also effective April 1, 2016, new regulations were issued by the California Fair Employment and Housing Council which, for the first time, requires Employers to have a written employment discrimination, harassment and retaliation prevention policy. The policy is often contained in employee handbooks and must provide a complaint process for the employee including the option of bypassing the immediate supervisor and going to a higher level of authority. It must be in writing and disseminated to employees, and should include a commitment that the Employer will “investigate”, take “appropriate corrective action” and a promise “not to retaliate”. Likewise Employers may wish to include language on abusive of conduct which was included in the harassment training requirement last year. If your employee handbook needs updating, contact me.
Finally, one note before it’s too late, Employers may wish to notify their Assembly or Senate representative of their objection to Assemblyman Mike Gatto’s legislation AB 2405, which would not only require Employers with 25 or more employees to give time off for employees to assist at their children’s school but to pay them for the time off as well. Currently this piece of the legislation is pending before the Committee on Labor and Employment in the Assembly.