HR Compliance

How Employers Can Look to California as a Trendsetter

By

Paycom Legal

| Feb 21, 2018

It seems that every year, California imposes another piece of legislation upon employers that hasn’t even been considered in any other state, let alone passed, and many California cities have their own set of complex ordinances. However, instead of thinking as California as an island or an anomaly, savvy business professionals should take a moment to consider how such laws would affect your company, even if you don’t yet have any employees in California. Why? History has shown that California is a trendsetter.

Be sure to subscribe to the HR Break Room to learn more on past, present and future California Laws and how they may soon affect your company.

Medical Marijuana

In 1996, the first time in history, marijuana was approved for medical use at the state level when California voters passed Proposition 215. Twenty-two years later, 30 states, the District of Columbia, Puerto Rico and Guam approve the use of medical marijuana in some form or fashion. And the other states?  Kentucky, Missouri, Oklahoma, South Dakota and Utah are all poised to consider medical marijuana legalization later this year.

Medical marijuana legislation may not be considered employment law traditionally, but there are a multitude of employment implications.

Questions for employers:

  • How should you craft company policy balancing an employees’ legal right to medically use marijuana with the interest of maintaining a safe work environment?
  • When can you fire an employee for marijuana use?
  • How are your organization’s mandatory drug tests affected?
  • What should your HR department do when an employee protected under the Americans with Disabilities Act requests a medical marijuana accommodation?

 

Local Minimum Wages

San Francisco was one of the first two cities to pass a local minimum wage in 2003, along with Santa Fe, New Mexico. Nine years later, California and New Mexico began the local minimum wage movement in earnest with the passage of minimum wages in San Jose and Albuquerque. Currently, 22 different California cities or counties have their own minimum wage regulations.

Questions for Employers:

  • How are you going to react if a local minimum wage is passed in a city where you have employees?
  • Does your HR team watch for such ordinances and have the flexibility to raise employees’ pay in order to remain compliant?
  • Are you flexible enough to pay an employee different minimum wages when he or she works in multiple localities with such ordinances in the same pay period?

 

Paid Sick Leave

San Francisco, again, spearheaded expanded worker protections in 2006 when it passed the first paid sick leave law in the nation. Additionally, it is currently the furthest reaching of such laws, providing protections for any worker—part time, temporary, or full time—who works within the city for an employer. Since then, 29 other California cities or counties have enacted paid sick leave laws, as well as eight states and Washington, D.C.

Question for Employers:

  • Can you ensure your accrual system separately tracks required paid sick leave for employees in all municipalities and states you operate and if your employees work or travel to those localities in question?

 

What’s Ahead: Predictive Scheduling and Equal Pay Laws

What additional California trends should employers keep an eye on?

First, consider predictive scheduling laws, which require employers to abide by certain scheduling procedures and penalize those that do not. To the surprise of no one, San Francisco was the first locality to pass such a predictive scheduling law in 2014. Following suit, Emeryville, CA, Seattle and New York City passed predictive scheduling laws that went into effect last year. Oregon was the first to enact state-wide legislation. While it is early in the predictive scheduling law movement, many other states and municipalities, even the United States Congress, have introduced predictive scheduling legislation.  Your state or city could be next.

And finally, equal pay laws. Sure, the federal Equal Pay Act and Title VII of the Civil Rights Act has been around since the 1960s and states have had some protections for years, but the movement of further expanding and enforcing the prohibition of pay disparity has recently increased and has two distinct iterations:

  1. Creating general prohibitions against pay disparity and mechanisms to enforce those prohibitions.
  2. Inhibiting employers making pay decisions on salary history.

 

In 2015, the California Fair Pay Act, touted by The Los Angeles Times as “[maybe] the nation’s most aggressive attempt yet to close the salary gap between men and women” was signed into law. Right on the heels of California, New York expanded equal pay protections with the 2015 passage of a group of bills in known as the Women’s Equality Agenda.

In 2016, the California Fair Pay Act was amended to also prohibit pay gaps on the basis of race and ethnicity, not just sex, and prohibits employers from justifying disparities solely on the basis of prior salary. 2016 also brought equal pay law amendments in Nebraska and Massachusetts and another state pay equity laws in Maryland. Oregon and Puerto Rico followed suit in 2017. Massachusetts became the first to pass a law restricting employers from inquiring about salary history in 2016.  California, Oregon, Delaware, Puerto Rico, New York City, San Francisco and Philadelphia followed in 2017.

The U.S. Equal Employment Opportunity Commission proposed in 2016 to collect a summary of pay data by race, ethnicity and sex from employers in addition to the current EEO-1 report. This data would allow the EEOC to more effectively tackle pay disparity. This data collection was put on hold, though, in August 2017 before it went into effect. At the same time, California was considering a bill similarly requiring employers to collect data on gender wage differentials. This bill was passed by the legislature in September following the announcement that the EEOC was putting a hold on its efforts. However, the bill was eventually vetoed by the governor. This type of law is likely to make another showing in California, and most certainly other states as well.

As you can see, California has started many employment law movements (and these were just a few). Click here, here and here to see a few recent laws that may be impacting your city or state in the near future.

Disclaimer: This blog includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal problems.