Review the new laws and legislative updates will likely impact California business in 2019.
It is time to review and prepare for another round of new employment law updates. 2019 is no exception being Governor Brown’s last influence on California laws as Governor. California Legislators sent Governor Brown 1,217 bills to consider in his final bill-signing period as Governor—more than any California governor has seen since 2004. The final tally: 1016 signed, 201 vetoed. Here are some that are likely to impact businesses for the coming year. All new laws take effect January 1, 2019 unless noted below.
- California Minimum Wage Updates
- FUTA Tax Rate in California Going Down to 0.6%
- Sexual Harassment Training SB 1343
- Gender Composition of Boards of Directors SB 826
- California Wage Payment
- Human Trafficking SB 970
- Lactation Accommodation SB 1976
- Copy of Payroll Records SB 1252
- Contractor Liability AB 1565
- Criminal History Inquiries SB 1412
California Minimum Wage
California State Minimum Wage will increase effective January 1, 2019
For employers with 26 or more employees the minimum wage goes from $11.00 to $12.00 per hour.
For employers with 25 or fewer employees the Increase is from $10.50 to $11.00 per hour.
See the 2019 State Minimum wage update for other state’s updates.
Exempt Employee Minimum Salary
The yearly minimum salary for properly classified exempt employees in California is twice the minimum wage x 2080 hours per year. Therefore, each year as the minimum wage goes up, so does the minimum amount an exempt employee must be paid. Exempt employee minimum salaries are as follows for 2019:
- Employers with 25 or fewer employees: $45,760 per year, or $880 per week.
- Employers with 26 or more employees: $49,920 per year, or $960 per week.
Municipality with different minimum wages include:
- Belmont – Increase from $12.50 to $13.00 effective Jan 1, 2019
- Cupertino – Increase from $13.50 to $15.00 effective Jan 1, 2019
- El Cerrito – Increase from $13.60 to $15.00 effective Jan 1, 2019
- Los Altos – Increase from $13.50 to $15.00 effective Jan 1, 2019
- Los Angeles – Increase from $13.25 to $14.25 effective July 1, 2019 (Employers with >26 EES)
- Los Angeles County – Increase from $13.25 to $14.25 effective July 1, 2019
- Malibu – Increase from $13.25 to $14.25 effective Jan 1, 2019
- Milpitas – Increase from $13.25 to $15.00 effective July 1, 2019
- Palo Alto – Increase from $13.50 to $15.00 effective Jan 1, 2019
- Pasadena – Increase from $13.25 to $14.25 effective July 1, 2019
- Redwood City – Increase from $11.00 to $13.50 effective Jan 1, 2019
- San Francisco– Annual indexing beginning January 1, 2019
- San Jose – Increase from $13.50 to $15.00 effective Jan 1, 2019
- San Leandro – Increase from $13.00 to $14.00 effective July 1, 2019
- San Mateo – Increase from $13.50 to $15.00 effective Jan 1, 2019
- Santa Clara-Annual indexing effective January 1
- Santa Monica – Increase from $13.25 to $14.25 effective July 1, 2019
- Sunnyvale– Annual indexing beginning January 1, 2019
Public Resources
FUTA Tax Rate in California Going Down to 0.6%
After years of recovery from the 2008 recession and increasing FUTA taxes due from employers in California, the state has finally met the key condition needed to avoid FUTA credit reductions. California had Title XII advance balances on January 1, 2018, but repaid its outstanding advances, and did not have an outstanding balance on November 10, 2018, hence there will be no FUTA credit reduction for employers in the state for 2018.
View the USDOL has published the official notice and credit reduction information.
Sexual Harassment Training SB 1343
Existing law requires employers with 50 or more employees to provide supervisors with sexual harassment training. This new law expands the training requirement to employers with 5 or more employees and requires that employers provide at least 2 hours of training to supervisory employees and at least one hour of training to non-supervisory employees by January 1, 2020 and once every two years thereafter. It also requires the DFEH to develop and post training materials for employers to use for these purposes.
There are several variations to this new requirement based on specific industries or employers including CA state legislators, talent agencies, law enforcement, in-home supportive services and hotel & motel employees.
Gender Composition of Boards of Directors SB 826
This new law provides for mandatory inclusion of women on corporate boards of directors. Specifically, by the end of 2019, publicly held domestic or foreign corporations with principal executive offices in California must have a minimum of one female director on its board, and by the end of 2021, these corporations must comply with the following: (1) If its number of directors is six or more, the corporation shall have a minimum of three female directors; (2) If its number of directors is five, the corporation shall have a minimum of two female directors; (3) If its number of directors is four or fewer, the corporation shall have a minimum of one female director. The new law also requires the Secretary of State to publish certain statistical information in this regard on its website.
California Wage Payment
Under the California Labor Code, employers must furnish to employees, semi monthly or at the time of payment of wages, an accurate, itemized, written statement that includes the wage amounts earned, hours worked, and the employee’s identity, among other things, subject to certain variations. Current and former employees of employers who are required to keep this information have the right to inspect or copy records pertaining to their employment, upon reasonable request.
Human Trafficking SB 970
This new law amends FEHA to require hotel and motel employers, by January 1, 2020, to provide at least 20 minutes of training on human trafficking awareness to employees who are likely to come into contact with victims of human trafficking. These employees include reception employees, housekeeping employees, bell desk employees, and other employees who regularly interact with customers. The new law requires covered employers to provide such training to covered employees within 6 months of hire and once every two years thereafter.
Lactation Accommodation SB 1976
This clarifies the existing law requiring employers provide a location other than a toilet stall to be used for lactation. The new law specifies that the location should be something other than a bathroom and further specifies that it generally should be a permanent location but that it can be a temporary location if (1) the employer is unable to provide a permanent location due to operational, financial, or space limitations; (2) the temporary location is private and free from intrusion while being used for lactation purposes; and (3) the temporary location is not used for other purposes while being used for lactation. The new law also provides that an agricultural employer may comply by allowing an employee to use the air-conditioned cab of a tractor or truck. If an employer can prove that it is an undue hardship to comply with these requirements, the employer may be able to provide a location (including a bathroom) other than a toilet stall for the employee to use for lactation purposes.
Copy of Payroll Records SB 1252
Existing law already requires that employees have a right to inspect or copy their payroll records and that they must be allowed to do so within 21 days of such a request. This new law clarifies that if an employee requests a copy of the records, the employer must provide the copies (as opposed to requiring employees to copy the records themselves).
Contractor Liability AB 1565
This new law took effect immediately as urgency legislation. It clarifies a new law enacted last year making certain direct contractors performing work in the state liable for unpaid wages by subcontractors. The amendments to the law provide requirements that must be met in order for a direct contractor to withhold payments to a subcontractor for “disputed sums.” In order to withhold payment, the contractor must specify in its contract with a subcontractor all items of information that will be requested of the subcontractor, such as payroll records and other information related to hours worked, etc.
Criminal History Inquiries SB 1412
This bill amends Labor Code section 432.7, which limits employers’ ability to conduct criminal history inquiries and to use criminal history information in employment decisions. Existing law makes an exception for employers who are required by federal or state law to inquire into an applicant’s or employee’s criminal history. The amendment is intended to tighten the exception to apply only where an employer is required by law to inquire into a “particular conviction” or where an employer cannot by law hire someone with a “particular conviction.” to make clear that employers may only consider “particular convictions” when assessing criminal history. “Particular conviction” is defined only to mean “a conviction for specific criminal conduct or a category of criminal offenses prescribed by any federal law, federal regulation or state law that contains requirements, exclusions, or both, expressly based on that specific criminal conduct or category of criminal offenses.
The content in this blog is intended for informational purposes only and do not constitute legal information or advice. The summaries do not not encompass other regulations that may exist, such as local ordinances. If you are seeking legal advice please contact an attorney.