Key New California Laws for 2018: What Employers Should Know

Governor Jerry Brown signed several laws in 2017 that will impact California employers next year. A summary of some of the key new laws follows, in numerical order by Assembly Bill (AB) and/or Senate Bill (SB). All of the laws outlined below are effective beginning January 1, 2018.

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Could A Litigation Finance Initiative Capitalize On #MeToo?

Since early October 2017, when the allegations against film producer Harvey Weinstein first surfaced in The New York Times and The New Yorker, there has been a steady stream of allegations of sexual harassment against high-profile individuals in the media, entertainment and political industries. Now, a Bay Area startup backed by Peter Thiel is looking to take advantage of a potential new wave of sexual harassment lawsuits.

On November 8, 2017, San Francisco-based litigation finance firm Legalist, Inc. launched a new initiative dubbed #MeToo Tales (“M2T”). According to its website, M2T is “a collaboration between Legalist and community organizers working to help victims of sexual harassment get justice.” M2T invites individuals who believe that they have been victims of sexual harassment in the workplace to share their stories confidentially on the initiative’s website or via a toll-free hotline. Legalist offers to pair claimants with its partner law firms and, for “eligible” individuals, to provide “angel” litigation funding of up to $100,000. Legalist recoups its funding by taking a portion of the proceeds from any successful litigation or settlement.

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Individual Liability for California Wage-and-Hour Violations: Developments on California Authority in 2017

Can employees sue individuals for wage-and-hour violations? That is the question numerous trial courts have been asked since the enactment of California Labor Code section 558.1 (“Section 558.1”) in 2016. Unfortunately, no binding authority on the question exists yet, but several trial courts have concluded that employees can.

Under Section 558.1(a), “[a]ny employer or other person acting on behalf of an employer who violates, or causes to be violated,” several labor code provisions, “may be held liable as the employer for such violation.” The term “other person acting on behalf of an employer” means any person who is an owner, director, officer, or managing agent of the employer. Lab. Code § 558.1(b). Generally speaking, managing agents are corporate employees who exercise substantial independent authority and judgment so that their decisions ultimately determine corporate policy; in other words, “managing agents” aren’t necessarily just company executives.

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DOL Announces Minimum Wage Increase for Federal Contractors

On September 15, 2017, the U.S. Department of Labor (“DOL”) announced the 2018 minimum wage rate for covered federal contractors and subcontractors, as required by Executive Order 13658.

Beginning January 1, 2018, the minimum wage for covered contractors will increase from $10.20 per hour to $10.35 per hour. The minimum cash wage for tipped employees performing work on or in connection with a covered federal contract will also increase from $6.80 per hour to $7.25 per hour, effective January 1, 2018. If the worker’s tips combined with the required cash wage of at least $7.25 per hour do not equal the minimum rate, then the contractor must increase the cash wage paid to a tipped employee to bring him or her up to $10.35 per hour.

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Beware: NYC Ban on Asking for Salary History Effective on Halloween: Employers Receive Guidance on Implementation

By Lynne Anne Anderson and Vik Jaitly

As we wrote about in April, starting on October 31, 2017, a NYC law will make it unlawful for employers of any size to inquire about a job applicant’s salary history during the hiring process by either: (1) asking about compensation history on a job application or during the interview process; or (2) conducting internet or other searches, contacting prior employers or running background checks in an effort to determine the applicant’s compensation history. Employers can only use an applicant’s compensation history to build a job offer if the applicant “unprompted” and “willingly” discloses that information.

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California’s Ban on Salary History Inquiries Takes Effect January 1, 2018

By Lynne Anne Anderson, Kate S. Gold and Irene M. Rizzi

California joins Delaware, Massachusetts, Oregon and several municipalities, including New York City and San Francisco, by banning inquiries into salary history. Aimed at combating wage disparity based on gender, the new law (AB 168), to be codified at Labor Code section 432.3, prohibits employers from seeking or relying upon salary history information.

Ban on Seeking Salary History Information

AB 168, which goes into effect on January 1, 2018, prohibits employers from seeking salary history information about applicants for employment. Specifically, employers may not, orally or in writing, seek salary history information, which includes compensation and benefits. The new law also prohibits employers from seeking such information through agents such as headhunters or recruiters.

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