A Special 2015 Legislative Update

10.15.15Baylee Olsen

Good news folks! On the last day to act, Governor Brown vetoed AB 465.

This bill would have barred mandatory employment arbitration agreements. Governor Brown called AB 465 “a far-reaching approach that has been consistently struck down in other states” for conflicts with federal law.

He further noted that, “California courts have addressed this issue of unfairness by insisting that employment arbitration agreements must include numerous protections to be enforceable, including neutrality of the arbitrator, adequate discovery, no limitation on damages or remedies, and a written decision that permits some judicial review and limitation on the costs of arbitration.”

While this is a “win” for California employers, we still advise that you take a very close look at your alternative dispute resolution agreements to make sure they comply with all the legal requirements under state and federal law to actually be enforceable. Unilateral “arbitration policies” buried in employee handbooks will likely never be enforceable.

More good news came from the Governor’s veto of SB 406, which would have expanded the state’s unpaid family leave policy. SB 406 would have expanded the pool of employees allowed to take up to 12 weeks off to care for grandparents, grandchildren, siblings, and parents-in-law.

The Governor indicated that this proposal would conflict with federal law and could require employers to provide up to 24 weeks of family leave in a year. However, the door may still be open on this issue for future legislation insofar as the Governor noted that he is “open to legislation to allow workers to take leave for additional family members that does not create this anomaly.”

In addition to these two strong veto actions, Governor Brown helped seal the deal in limiting the recoverable penalties under Private Attorney General Actions brought by employees. The Governor signed AB 1506, which gives employers a chance to “cure” technical violations in an itemized wage statement before being subject to costly litigation. There are, however, strict time limitations and notice requirements to prove alleged defects have been remedied.

Employers are advised to consult with human resource professionals or legal counsel if they receive any notices about alleged wage and hour statement violations from any source. Because this amendment was deemed urgent, it went into effect immediately. Yippee!

Now, for a little bad news…or is it? California now has one of the most progressive Equal Pay laws in the nation, SB 358. The new law signed by Governor Brown earlier this month mandates equal pay for “substantially similar work,” as well as giving employees the right to compare salaries with co-workers without fear of retaliation.

The phrase “substantially similar work” is the kicker. It means that employees do not have to have the exact same set of duties to demand equal pay, but rather they simply need to hold equal “value” to the company. Of course, certain considerations like job seniority and merit pay are still allowed, although the burden will be on the employer to prove that gender was not a motivating factor.

Going into this last quarter of 2015, it may be a good idea to audit your labor costs and review your pay scales to ensure compliance with the new law. Of course, SDHR Consulting is here to help!