2018 Legislative Updates
As you prepare your business for the New Year, it’s important to be aware of legislation that could impact your business come 2018. Navigating local, state and federal laws can be daunting, so our office is committed to providing education and resources about key laws and regulations small businesses might have to comply with. Various laws may have overlapping coverage, such is the case with parental and sick leave laws, so it is important to understand all of the local, state and federal laws involved. In many cases, San Francisco requirements often exceed state laws, although there may be requirements such as employee notifications and other requirements at the state and federal levels to achieve compliance.
Governor Brown signed into law a host of new employment laws that affect California workplaces starting January 1, 2018. Here’s a summary of key laws, along with best practices to prepare and ensure compliance.
- ASSEMBLY BILL 168: Employers Salary History Information
- ASSEMBLY BILL 1008: Employment Discrimination – Conviction History
- SENATE BILL 63: New Parental Leave Act for Small Employers
This information is intended to provide guidance about new employment laws, and should not be interpreted as legal advice. For questions and information pertaining to employment laws and compliance, contact the following organizations for assistance:
- Office of Labor Standards and Enforcement (San Francisco specific labor laws)
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- California Employers Association
- Lawyers’ Committee for Civil Rights of the San Francisco Bay Area
Legal Services for Entrepreneurs
- The Bar Association of San Francisco
Assembly Bill 168 amends the California Labor Code to prohibit all employers from seeking an applicant's salary history, including compensation and benefits, either orally or in writing. It also requires employers to provide the position's pay scale to applicants upon reasonable request. If the employee choses to disclose their salary history, or the information is publicly available, the law does not prevent the employer from considering or relying on the information to set the salary for the applicant, nor shall the information be used to justify disparity in compensation.
The stated goal is to narrow the gender wage gap by preventing employers from relying on an applicant's prior salary as factors, which may have been a result of gender bias.
Click here to read the state legislation.
What does AB 168 mean for San Francisco Businesses?
For San Francisco businesses, the Board of Supervisors passed a related law locally in July 2017 that goes into effect July 1, 2018. San Francisco businesses should comply with the state requirements to achieve full compliance, which currently supersedes the city ordinance.
San Francisco’s Employer Consideration of Applicant’s Salary History Ordinance amends the Police and Administrative Codes to ban employers, including City contractors and subcontractors, from considering current or past salary of an applicant in determining whether to hire an applicant or what salary to offer the applicant. The ordinance also prohibits employers from asking applicants about their current or past salary or disclosing a current or former employee’s salary history without that employee’s authorization unless the salary history is publicly available.
Click here to read the legislation for the city’s Employer Consideration of Applicant’s Salary History Ordinance.
How to Prepare
Employers should carefully review employment applications and hiring processes to ensure that they do not inquire about salary history information. If employment applications and onboarding documents were purchased “off the shelf” from office supplies stores, check to see whether salary history questions are included and cross off such questions completely, if so. Employers should revise applicable hiring policies and procedures and interview/screening guidelines, to make clear that the business does not request salary history and will not use salary history. Procedures should be determined and documented to provide pay scale information upon an applicant’s request. And, training should be provided to all personnel involved in the hiring process to ensure they understand the restrictions and obligations imposed by the new law.
Assembly Bill 1008 prohibits all employers with 5 or more employees to include on any application for employment any question that seeks the applicant’s conviction history, to inquire into or consider the conviction history until that applicant has received a conditional offer, and, when conducting a conviction history background check, to consider, distribute, or disseminate information related to specified prior arrests, diversions, and convictions.
An employer who intends to deny an applicant a position of employment due to the applicant’s conviction history is required to make that assessment of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job and provide the applicant a written notification of the decision. That notification may, but is not required to, justify or explain the employer’s reasoning for making the preliminary decision, but must include a copy of the conviction history report, the disqualifying conviction or convictions that are the basis for the preliminary decision to rescind the offer and the applicants right tor responded to the notice. The applicant has the right to respond and the employer shall take into consider information submitted before making final decision.
Click here to read the legislation.
What does AB 1008 mean for San Francisco Businesses?
San Francisco passed its Fair Chance Ordinance (FCO) in 2014. The Fair Chance Ordinance covers employees and applicants for jobs within the City and County of San Francisco, if the current or prospective employer has 20 or more employees (total worldwide). There is current legislation BOS File No: 171170, pending at the board of Supervisors (as of December 20, 2017) that bring the SF employer size in alignment to the State employer size and add penalties and private right of action. The FCO also prohibits covered employers from ever considering the following:
- An arrest not leading to a conviction, except for unresolved arrests.
- Participation in a diversion or deferral of judgment program.
- A conviction that has been dismissed, expunged, otherwise invalidated, or inoperative.
- A conviction in the juvenile justice system.
- An offense other than a felony or misdemeanor, such as an infraction.
- A conviction that is more than 7 years old (unless the position being considered supervises
minors or dependent adults).
In addition, SF employers are to state in all job solicitations/ads that qualified applicants with arrest and conviction records will be considered for the position in accordance with this ordinance. Suggested language: “Pursuant to the San Francisco Fair Chance Ordinance, we will consider for employment qualified applicants with arrest and conviction records.”
- Visit the Office of Labor Standards’ Enforcement’s website for information on the SF Fair Chance Ordinance, including covered employers and calculating supplemental benefits.
How to Prepare
Starting January 1, 2018 SF employers that have 5 – 19 employees are required to follow state law. SF employers 20 or more are required to comply with what is more legally onerous between the state and local law. Once the File No. 171170 becomes law then then all SF employers with 5 or more employees is to comply with what is more legally onerous between the two laws.
Follow the same guidelines regarding application and management and employee training as in the Employers Salary History Information. Delete and/or cross out any question asking for conviction history on “off the shelf” applications.
Office of Labor Standard and Enforcement (OLSE) is hosting two webinars on the Fair Chance Ordinance.
The New Parent Leave Act, Senate Bill 63, requires small businesses in California with 20 or more employees to provide eligible employees up to 12 weeks of unpaid, job-protected leave to bond with a new child. Eligible employees must be within a 75-mile radius and have at least 1,250 hours of service with the employer within the previous 12 months. Leave must be taken within one year of the child’s birth, adoption or foster care placement. Note that the parental leave is only for baby bonding and not for other reasons, such as family member’s health issues. Employers must maintain and pay for health care coverage at the same level had the employee not taken the time off.
Before the start of parental leave, the employer must provide the employee with a guarantee of reinstatement to the same or comparable position following the leave. Also, if both parents work for the same employer and are eligible for leave, the employer can require them to share the 12-week allotment between them.
This law will primarily impact employers with 20 to 49 employees who are currently not required to provide parental leave under the federal Family and Medical Leave Act or state California Family Rights Act. SB 63 essentially builds upon the existing California Family Rights Act (CFRA) which provides protections to firms with 50+ employees.
Click here to read the legislation.
How does SB 63 impact San Francisco Businesses?
For San Francisco employers, it is important to know SB 63 protects unpaid leave. Employees may still use accrued vacation, paid sick time, or other paid or unpaid time off negotiated with the employer. Employees can apply for California Paid Family Leave (employee-funded) and the San Francisco Paid Parental Leave Ordinance (employer-funded) benefits.
- Visit the Office of Labor Standards’ Enforcement’s website for information on the SF Paid Parental Leave Ordinance, including covered employers and calculating supplemental benefits.
How to Prepare
Employers with 20 or more employees should update employee handbooks and personnel policies, and create/update leave request forms and notices reflecting the new leave rights, such as allowance of 12 weeks unpaid, maintenance of health coverage and other requirements. Also, employers should provide training to managers about the new leave protections and obligations. Now is also a good time to contact an HR professional who can review your personnel policies to ensure your business is in compliance with local, state, and federal leave laws.