There are new laws taking effect in 2017 that will have an impact on your business. Employers need to be aware of significant changes in key areas, such as the state minimum wage. Other new laws make small changes or may relate only to specific industries. Unless specified, all new legislation goes into effect on January 1, 2017. This year, many bills feature delayed or phased-in implementation. Wage and Hour Several new California laws will affect employers’ wage-and-hour obligations in 2017. Minimum Wage SB 3 will increase the minimum wage over the next several years to $15 an hour. For January 1, 2017, businesses with 26 or more employees must pay a minimum wage of $10.50 per hour. The minimum wage increase will require all employers to post a new Minimum Wage Order (MW-2017). The upcoming minimum wage increase also will have an effect on other pay practices, such as the overtime rate. Itemized Wage Statements AB 2535 amends Labor Code Section 226 and clarifies that employees who are exempt from the payment of minimum wage and overtime are not required to have their hours tracked and logged on an itemized wage statement, commonly referred to as a pay stub. Payroll AB 1847 requires employers who must notify employees of their eligibility for the federal Earned Income Tax Credit to also notify these employees that they may be eligible for the California Earned Income Tax Credit. The bill updates the required notice that must be given to employees. Challenges to Minimum Wage Violations Under AB 2899, employers who contest a Labor Commissioner ruling that they failed to pay the minimum wage must post a bond equal to the unpaid wages, excluding penalties. Local Wage Enforcement SB 1342 grants local officials or department heads the power to issue subpoenas and to report noncompliance with employment-related ordinances, such as local minimum wage ordinances, to superior court judges. The legislative intent of this new law further encourages cities and counties to enact measures to combat wage theft. Janitorial Workers AB 1978 enacts new recordkeeping, registration and training requirements for the janitorial industry. Overtime for Private Elementary or Secondary School Teachers Under AB 2230, private school employees will need to meet a new minimum earnings test that will look at the comparable salaries offered to public school teachers in the school district or county, rather than the state minimum wage. This legislation is effective July 1, 2017. Licensure Requirements for Hair Salons/Nail Salons AB 2437 requires any establishment that is licensed by the Board of Barbering and Cosmetology (BBC) (e.g., hair salons, nail salons, estheticians, etc.) to post a notice regarding workplace rights and wage-and-hour laws by July 1, 2017. The Labor Commissioner must create the model notice. Failure to post the notice will result in a fine. Domestic Workers SB 1015 extends the Domestic Worker Bill of Rights, which was to be repealed on January 1, 2017. Temporary Services; Wages Under the Labor Code, employees of a temporary service employer must be paid weekly, regardless of when the assignment ends. AB 1311 applies the weekly pay requirement to security guards employed by private patrol operators who are temporary services employers. This urgency legislation took effect on July 25, 2016. Discrimination and Retaliation Protections Several new laws expand employee protections for 2017. Fair Pay Last year, significant amendments were made to California’s equal pay laws to address gender wage inequality. This year, two new bills expand California’s Fair Pay Act.
- SB 1063 prohibits an employer from paying any of its employees wage rates that are less than the rates paid to employees of another race or ethnicity for substantially similar work.
- AB 1676 specifies that, under the Fair Pay Act, prior salary cannot, by itself, justify any disparity in compensation.
- AB 326 — requires the release of funds held pending a prevailing wage determination;
- AB 1926 — relates to the payment of apprentices for pre-employment activities, such as testing or training; and
- SB 954 — limits the ability for a nonunion contractor to receive a credit for certain payments made against the prevailing wage.