Governor Brown Signs AB 908 Increasing Paid Family Leave Benefits

Yesterday, California Governor Jerry Brown signed Assembly Bill 908 (“AB 908”).  This new bill increases the amount of weekly benefits payable to employees who take leave under California’s existing paid family lave law.

California’s existing paid family leave law allows an employee to request paid leave to care for a family member with a “serious health condition” or to bond with a new child.  While on leave under existing law, an employee receives 55% of his or her usual salary, up to a maximum of $1,129/week, for a period of up to 6 weeks.  These benefits are paid for by employees through mandatory payroll deductions payable to the state’s SDI program.  The benefits begin after a 7 day waiting period.

Under the new law AB 908, the state will increase the weekly benefit amounts to employees who go out on paid family leave starting on January 1, 2018.  The amount of the increase in benefits will be determined by the employee’s income.  An employee earning below about $20,000/year will now receive 70% of his or her usual salary.  A higher income worker will receive 60% of his or her usual salary, up to a maximum benefit of around $1,260/week.

(Note:  These numbers are estimates because the income threshold and maximum benefit amounts are tied to the state’s average weekly wage, which changes every year.  In addition, the new law states that the maximum benefit “shall not exceed the maximum workers’ compensation temporary disability indemnity weekly benefit amount established by the Department of Industrial Relations pursuant to Section 4453 of the Labor Code.”  This number also changes every year based on the state’s average weekly wage.   So the actual threshold number and weekly maximum benefit amount for 2018 cannot be known until January 1, 2018.  You can find a chart showing existing 2016 maximum benefit amounts here.)

Finally, AB 908 will eliminate the 7 day waiting period so that these increased benefits become payable immediately.

You can read the full text of AB 908 here.  You can find the Governor’s press release announcing the new law here.

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New Regulations on Sexual Harassment Take Effect Today

The California Fair Employment & Housing Council (FEHC) recently passed new regulations that strengthen California’s Fair Employment & Housing Act (FEHA).  This is the state law banning discrimination, harassment, and retaliation in the workplace, which is already among the toughest in the nation.  These new regulations take effect on April 1, 2016.

Under the new regulations:

  1. Employers with fewer than 5 employees may now be subject to FEHA if they use outside contractors, interns, and/or unpaid volunteers.
  2. FEHA is broadened to protect not only employees, but also unpaid interns and volunteers.
  3. Transgendered workers are protected by the elimination of the word “woman” from FEHA’s pregnancy-related protections.
  4. Sexual harassment policies, to be legally compliant, must now include:
    • A full list of all prohibited bases on which to make employment decisions, including gender identity and gender expression;
    • A statement that the policy protects against harassment not only by other employees but also third parties with whom an employee comes into contact;
    • A statement that an employee is not required to complain to his/her supervisor;
    • A full list of personnel designed by the employer to receive complaints;
    • A statement to supervisors informing them to whom they should complain;
    • A statement that the employer will conduct a fair, timely, and thorough investigation that provides all parties with due process and that reaches a reasonable conclusion that is supported by the findings of the investigation;
    • A statement assuring the complainant that his/her complaint will be resolved on a timely basis;
    • A statement that the employer will guarantee confidentiality throughout the process, to the extent possible;
    • A statement that the employer will monitor and track the investigation into the complaint for progress, on a regular basis;
    • A statement that all investigations will be impartial and conducted by persons qualified to conduct workplace investigations;
    • A guarantee of “appropriate options for remedial actions and resolutions,” including a guarantee that remedial measures will be taken if an investigation concludes that wrongful conduct occurred; and
    • A statement making clear that retaliation is illegal and will not be tolerated.
  5. Employers are now required to distribute pamphlets (DFEH-185, which can be found here) on sexual harassment and ensure that employees are provided a copy of the employer’s sexual harassment policy by hard copy, email, or intranet.
  6. Employers must translate their sexual harassment policy into any other language when 10% or more of the employer’s workforce speaks that language.
  7. Employers now must keep copies of all materials distributed or used in mandated sexual harassment training classes for two years, including PowerPoint slides, handouts, attendance records, questions submitted to the trainer, and responses given by the trainer.

These new regulations will likely require employers to make significant changes to their existing employee handbooks and sexual harassment policies.  Y0u can find the full text of the regulations here.

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Filed under Employment & HR

New Pregnancy Disability Leave Regulations Take Effect Today

The California Fair Employment & Housing Council (FEHC) recently passed new regulations concerning pregnancy disability leave (PDL). These new regulations take effect on April 1, 2016.

Under the new regulations, California employers with 5 or more employees must:

  1. Provide employees with notice of their PDL rights either (a) in the next version of the employee handbook, or (b) by sending an annual notice to all employees of their PDL rights;
  2. Post a copy of the state’s new PDL poster, “Your Rights and Obligations as a Pregnant Employee,” in a conspicuous place in the workplace; and
  3. Provide a copy of “Your Rights and Obligations as a Pregnant Employee” whenever an employee provides the employer with notice of a pregnancy or requests leave or an accommodation due to pregnancy.

You can find the poster “Your Rights and Obligations as a Pregnant Employee” here.

You can find the text of the new regulations here.

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California Raises Minimum Wage to $15/Hour

California Governor Jerry Brown announced that a deal had been reached with the California legislature to gradually raise the state’s minimum wage to $15 an hour by 2022.  This would give California the highest state-wide minimum wage in the country.

Under the new law, the state minimum wage will increase from the current $10 an hour to $10.50 an hour effective January 1, 2017.  Thereafter, the state minimum wage will increase to $11 an hour on January 1, 2018, with successive $1 an hour increases on January 1st of each successive year until reaching $15 an hour on January 1, 2022.  The law allows for annual cost-of-living increases thereafter so that the state minimum wage keeps up with inflation.

Businesses with 25 or fewer employees will have one additional year to comply with each minimum wage reset mandated by the new law.

It is important to remember that many municipalities in California already mandate a minimum wage that is higher than the state minimum wage.  This new law will not impact these local laws that require a higher minimum wage.  If your business operates within a municipality with its own minimum wage law, you will have to pay the higher of either the municipality’s minimum wage or the new state minimum wage.

In states that do not have their own minimum wage law, then the federal minimum wage law still applies.  The federal minimum wage is currently $7.25 an hour and has not been changed since 2009.

You can find more information on the new California minimum wage law here.  You can find Governor Brown’s press release announcing the deal with legislators here.

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Filed under Employment & HR, General Business

CA Supreme Court Clarifies Definition of “Prevailing Party”

California law states that the “prevailing party” in a lawsuit is entitled to recover its costs from the other party.  The law defines the “prevailing party” as “the party with a net monetary recovery” and “a defendant in whose favor a dismissal is entered.”  So what happens when a plaintiff sues a defendant but, before trial, the defendant pays a settlement to the plaintiff in exchange for the plaintiff agreeing to dismiss the lawsuit?  Who is the prevailing party — is it the plaintiff  (did the plaintiff receive a “net monetary recovery” by being paid a settlement) or the defendant (did the defendant get a dismissal entered in its favor)?

Plaintiffs and defendants frequently both claim to be the “prevailing party” in this very common scenario.  In most cases, the written settlement agreement between the parties compromises and states specifically that no party is the prevailing party.  But what happens when the parties’ settlement agreement is silent — will the law default to a finding that one or the other is the prevailing party?

On March 10, 2016, in DeSaulles v. Community Hospital of the Monterey Peninsula, the California Supreme Court answered this question.

In DeSaulles, the Court ruled that a dismissal pursuant to a monetary settlement is not a dismissal in the defendant’s “favor.”  Thus, the defendant is not the prevailing party according to the Court.  In contrast, a settlement payment of any amount to a plaintiff is a “net monetary recovery.”  Thus, the settling plaintiff is legally considered the prevailing party under California law in the absence of any contrary agreement between the parties.

The bottom line:  when settling active litigation cases, be sure your written settlement agreement addresses the prevailing party issue.  If the settlement being paid is intended to be the one and only payment to the plaintiff, the defendant should be sure the agreement states that there is no prevailing party and that neither party shall be entitled to costs.

You can find Court’s opinion here.

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