2015 California Employment Laws Part 2: Wage and Hour

Wage and Hour Laws 2015Part 2 of a 4-part series on California Wage and Hour Law changes. Wage and Hour compliance is one of the most challenging areas of HR and one area where having an outsourced HR team of experts can save you a lot of money by lowering risk for workplace compliance. In 2015, many new laws have placed additional obligations on employers and have expanded liability.

Increased Liability for Employers That Contract for Labor:

AB 1897 imposes expanded liability for employers who contract labor.

When employers use contracted labor, such as a staffing agency, the employer can be held liable for wage and hour violations. In other words, if a labor contractor fails on any of these levels: fair pay, providing workers’ compensation, mandatory sick leave to its provided labor  the “client employer” can now be held legally responsible AND liable. For more information, review the article by the California LABOR Federation. 

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Rest and Recovery Periods

SB 1360 expands definitions of on-the-clock time for recovery from heat illness as paid breaks and counts towards hours worked. SB 1360 reiterates what is already law and was passed simply to clear up any employer confusion.

Waiting Time Penalties

AB 1723 authorizes for a penalty imposed upon an employer for the willful failure to timely pay wages of an employee who resigns or is discharged, also known as “waiting time”.

AB 2743, provides a waiting time penalty if unionized theatrical and concert venue employers violate any agreed upon time frame for payment of final wages contained in a collective bargaining agreement.

Protections for Complaints Under the Labor Code

AB 2751 clarifies that a $10,000 penalty fined to an employer who discriminates or retaliates against an employee who complains of Labor Code violations will be awarded to the employee or employees who “suffered the violation.”

Timeframe for Recovery of Wages: Liquidated Damages

AB 2074 authorizes an employee to bring a civil lawsuit against his/her employer for the unpaid balance of wages or compensation owed to that employee.

Also permits an employee to recover liquidated damages equal to the unpaid wages plus interest in a court action alleging payment of less than the state minimum wage any time within the statute of limitations.

Child Labor Law Violations: Increased Remedies

AB 2288, the Child Labor Protection Act of 2014, provides additional penalties for violations of California laws regarding employment of minors, including a penalty of $25,000 – $50,000 for “Class A” violations involving minors 12 years of age or younger.

In addition, the statute of limitations for claims that arise from violations of employment laws is extended, until the minor is 18 years of age.

Foreign Labor Contractors

SB 477 Employers are prohibited from using non-registered foreign labor contractors to supply workers in California. SB 477 also imposes disclosure requirements and other obligations on foreign labor contractors. There are penalties for noncompliance and joint liability for employers who use non-registered foreign labor contractors and potential for civil action.

Prevailing Wages

A number of bills signed this year relate to prevailing wages. Employers who provide services or construction work on public works projects for the government or public entities must pay the prevailing wage, which is usually significantly higher than the minimum wage.

The bills include:

  • AB 26; Public Works: defines the term “public works” for purposes of requirements regarding the payment of prevailing wages.
  • AB 1870; Public Works; requires that, except as specified, not less than the general prevailing rate of per diem wages, determined by the Director of Industrial Relations, be paid to workers employed on public works projects with regards to apprenticeship.
  • AB 1939; Public Works; allows a contractor to bring an action against “hiring parties” to recover any increased costs (including labor costs, penalties and legal fees) incurred because of a determination that the work performed on the project was a covered public work and is subject to prevailing wage laws
  • AB 2272; Public Works; defines “public works” to include construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds.
  • AB 2744; Public Works; imposes a civil penalty on contractors/subs who are determined to have knowingly violated provisions regulating the employment of apprentices on public works projects. The contractor/sub who is determined to have knowingly committed a s violation may additionally be denied the right to bid on or be awarded or perform work and provides for a process to collect the civil penalty.
  • SB 266; Another notable bill, SB 266, responds to concerns regarding delays in determining whether a project is a public works project for prevailing wage purposes

Background Checks

Several new laws relate to criminal background checks.

Criminal History Information in Public Contracts

AB 1650 requires contractors who bid on state contracts involving on-site construction-related services to verify that they will not ask applicants for the on-site construction-related jobs to disclose information concerning criminal history at the time of an initial employment application.

Services to Minors

AB 1852 requires a business that provide specified services to minors, must provide a written notice to the parent or guardian of the minor receiving those services. The written notice should address the business’s policies relating to employee criminal background checks.