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This HR Alert addresses the following topics:
  1. BIG Changes to California’s FEHA Regulations
  2. Pasadena Approves Minimum Wage Increase
  3. California Workers’ Compensation Claim Form Updated

BIG Changes to California’s FEHA Regulations

Significant changes were recently made to California’s Fair Employment & Housing Act (FEHA) regulations, and are effective April 1, 2016.  Some changes were made to reflect court rulings, and other changes are entirely new.  FEHA addresses, among other topics, discrimination and harassment in the workplace.  We highlight the significant changes below.

1.       Companies Using Contracted Temp Agency Employees are Employers of Those Workers

A small but significant change was made to the definition of an “Employee” under FEHA.  Specifically, a temporary service agency and its contracting company client are stated to be joint employers of the temporary workers provided to those contracting companies, with each party considered an employer “for such terms, conditions and privileges of employment under the control of that employer.”  Previously, the regulation stated that a temporary worker “may be” an employee of the contracting company; the regulations now state that a temporary worker “is an” employee of both entities.

2.       Clarification on Determining Which Employers are Subject to FEHA

The FEHA regulations have been changed to clarify the definition of “employer.”  Employers are those businesses with five or more employees total, regardless of location, and the employees counted can be full-time, part-time, or on paid or unpaid leave (including CFRA leave, leave of absence, disciplinary suspension, or other leave).  The regulations note that the FEHA protections themselves do not apply to employees located outside of California, even though such employees are counted for determining “employer” status under FEHA.

3.       Independent Contractor is Defined

A “person performing services pursuant to a contract” meets the following criteria: “(1) has the right to control the performance of the contract for services and discretion as to the manner of performance; (2) is customarily engaged in an independently established business; and (3) has control over the time and place the work is performed, supplies the tools and instruments used in the work, and performs work that requires a particular skill not ordinarily used in the course of the employer’s work.”

4.       Standards of Discrimination and Retaliation are Defined

The regulations state that discrimination and retaliation are established if a “preponderance of the evidence demonstrates that an enumerated basis was a substantial motivating factor in the denial of an employment benefit to that individual by the employer or other covered entity, and the denial is not justified by a permissible defense.”  This standard also now applies to disability discrimination.

5.       Harassment Rules and Protections are Broadened

Numerous changes were made to the regulations governing harassment to reflect and expand on current rules in this area.  Notable changes are highlighted as follows:

  • Rules prohibiting harassment are specifically stated to protect unpaid interns, volunteers, and persons providing services pursuant to a contract.
  • “An employee who engages in unlawful harassment of a co-employee is personally liable for the harassment, regardless of whether the employer knew or should have known of the conduct and/or failed to take appropriate corrective action.”
  • A determination of whether an employer has taken reasonable steps to prevent and correct discriminatory and harassing conduct, “includes an individualized assessment, depending on factors sometimes unique to the particular employer including, but not limited to, its workforce size, budget, and nature of its business, as well as upon the facts of a particular case.”
  • Employers are required to have a harassment, discrimination, and retaliation prevention policy that meets the newly stated regulatory requirements.
  • Detailed changes were made to harassment training related to training content and document retention.

6.       Discrimination Prohibited Against Holders of Driver’s Licenses Issued Per Vehicle Code § 12801.9

Section 12801.9 allows driver’s licenses to be issued to undocumented immigrants in California.  FEHA regulations now state that an employer cannot discriminate against an employee or applicant if he or she holds or presents such a driver’s license.  The regulations also limit the circumstances under which an employer may require an applicant or employee to hold or present a driver’s license to when possession of a driver’s license is (1) required by law, or (2) required by the employer and is otherwise permitted by law.  Any policy requiring driver’s licenses must be uniformly applied and consistent with business reasons.

7.       Pregnancy Disability Leave Clarified

Pregnancy disability leave (PDL) has been clarified as to how and when leave may be taken.   Specifically, PDL does not need to be taken in one continuous period of time.  Employees are eligible for up to four (4) months leave per pregnancy, not per year.

8.       Religious Creed Discrimination Updated Following Recent Supreme Court Ruling

In light of the 2015 U.S. Supreme Court ruling in EEOC v. Abercrombie & Fitch Stores, Inc., California regulations for religious creed discrimination have been updated.  “Religious creed”, a category protected from discrimination, “encompasses all aspects of religious belief, observance, and practice, including religious dress and grooming practices.”  Refusing to hire an applicant or terminating an employee in order to avoid the need to accommodate a religious practice constitutes religious creed discrimination.  A reasonable accommodation is “one that eliminates the conflict between the religious practice and the job requirement,” but does not require segregation of an employee from customers or the general public (unless so requested by an employee).  The protections include retaliation and apply to employees, applicants, apprentices, unpaid interns, and “any other program to provide unpaid experience for a person in the workplace or industry.”

9.       Nondiscrimination Compliance Requirements for State Contractors Have Changed

State contractor requirements for nondiscrimination programs no longer apply to previously defined “minorities,” but now apply to all categories of persons protected under FEHA. To that end, nondiscrimination clauses in state contractor agreements have been modified.  Further, the affirmative action program requirement, and presumption of compliance, has been removed from the regulations.  Additionally, when state contractors recruit from labor organizations, they no longer have reporting and recording requirements for when the labor organization is unable or unwilling to refer “minorities or women” for jobs; rather, recruiting, in general, must be neutral and not favor, discriminate against, or disparately impact any group protected by FEHA on the basis of an improper classification.

10.   Other Notable Changes

  • Rules regarding discrimination and harassment on the basis of sex have been updated to be made current, including, in part, protection of persons on the basis of sex, gender identity, or gender expression.
  • Transgender persons who are disabled by pregnancy are expressly covered by pregnancy disability protections.
  • Posting requirements for PDL have been changed, effective April 1, 2016.  (Click here for the recent HR Alert.)
  • The “interactive process” for disability accommodation requests “requires an individualized assessment of both the job at issue and the specific physical or mental limitations of the individual that are directly related to the need for reasonable accommodation.”

Action Items:

  • Temp Agency Joint Employment:
    • Companies engaging temporary staffing agencies to provide temporary workers should review procedures for onboarding temporary employees and policy compliance.
    • Companies should review contracts with Temporary Staffing Agencies in light of co-employer relationship and investigate the joint employer’s practices.
  • FEHA Employers:  Review your status to determine if FEHA applies to you.
  • Independent Contractors:  Review the stated criteria to evaluate the status of independent contractors to ensure compliance with FEHA.
  • Harassment Prevention:
    • Contact ManagEase at sales@managease.com for an update to harassment, discrimination, and retaliation prevention policies.
    • Contact ManagEase at sales@managease.com to schedule mandatory harassment training.
  • Driver’s Licenses:
    • Review discrimination policy and practices for compliance regarding driver’s licenses of undocumented immigrants.
    • Review driver’s license policy for compliance.
  • Pregnancy Disability Leave: Review leave requests to ensure compliance with the terms of when and how PDL may be taken.
  • Religious Creed Discrimination: Review policies and practices to ensure compliance with religious creed protections.
  • State Contractors:
    • Review and revise policies related to nondiscrimination to cover the categories of persons protected under FEHA.
    • Review affirmative action plans to determine if appropriate under the circumstances.
    • Revise reporting and recording requirements for recruiting.
    • Review recruiting practices and procedures to ensure compliance.

Pasadena Approves Minimum Wage Increase

Earlier this month, Pasadena voted to increase minimum wage to $10.50 per hour beginning July 1, 2016.  It will increase every year thereafter until it reaches $13.25 in 2018. The City Council will then review the economic effects in 2019, to determine if a further increase to $15 per hour in 2020 is appropriate.  The requirement will apply, in part, to businesses, non-profits, and tipped workers.  There will also be a “learners” exemption for workers between the ages of 14-17 for 160 days.

Action Items:

  • Review current pay rates and 2016 budget impact of wage increases.
  • Contact ManagEase for a California Fair Pay Act compensation audit to identify gender wage disparities.

California Workers’ Compensation Claim Form Updated

The California Division of Workers’ Compensation (DWC) updated the Claim Form (DWC 1) and Notice of Potential Eligibility for 2016.  These forms should be provided by the employer to the injured worker upon notice of injury.

Action Items:

  • Click here for the updated form and notice.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2016 ManagEase, Incorporated.

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