Summary of Key New California Laws for 2019 (and Beyond): What Employers Should Know

In 2018, Governor Brown signed several laws impacting California employers. A summary of some of the key new laws follows. The effective date of each new law is indicated in the heading of the Assembly Bill (AB) and/or Senate Bill (SB).1 The list below is in numerical order by AB or SB.

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Do Your Employees Use Cell Phones for Work While Driving?

Many employers have policies regarding the use of cell phones while driving, including the requirement to use the car’s hands-free, Bluetooth phone system, and abide by all applicable laws. But what happens when an employee still abides by the employer’s policy, is involved in a car accident, and causes injuries to a third party? Can the employer be held liable under the theory of respondeat superior?

Well, it depends on the facts and circumstances of the case. By way of background, respondeat superior means that an employer is vicariously liable for the torts of its employees when these employees commit the wrongful acts within the scope of their employment. California courts have held that the determination of whether an employee has acted within the scope of employment is a question of fact, but it also can be a question of law in circumstances where the facts cannot be disputed and there can be no conflicting inferences possible.

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Big Law Hit Again With a California Gender Discrimination Lawsuit

Earlier this week, Wendy Moore, a former partner at Jones Day, filed a representative action against the law firm in San Francisco Superior Court, alleging a single cause of action pursuant to the California Private Attorneys General Act (“PAGA”) for alleged violations of the California Equal Pay Act, as amended by the Fair Pay Act of 2015, and related violations of the California Labor Code. The PAGA permits employees to bring civil suits to recover penalties on behalf of themselves and other aggrieved employees for Labor Code violations. Unlike class actions, PAGA claims can proceed regardless of whether the plaintiff can meet the requirements to certify a class.

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California Considers Ban On Forced Arbitration By Employers

Late last year, a bipartisan coalition in the United States Senate sponsored legislation to ban the use of mandatory arbitration agreements to settle sexual harassment and sex discrimination claims (H.R. 4734/S. 2203). While that bill—titled the “Ending Forced Arbitration of Sexual Harassment Act of 2017”—remains pending, a similar bill is also now pending before the California legislature (A.B. 3080). If enacted, A.B. 3080 would prohibit employers from requiring mandatory arbitration agreements as a condition of employment, continued employment, or the receipt of any employment-related benefit, such as a bonus.

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Are You Correctly Calculating Overtime?

Recently, the California Supreme Court issued its decision in Alvarado v. Dart Container Corporation of California. The Court’s decision changes the manner in which an employer must calculate overtime for employees who earn a flat sum bonus during a single pay period. Accordingly, based on the Court’s decision, this is yet another area where the rules in California differ from the federal rules. This decision is significant because it applies retroactively subject to the applicable statute of limitations.

By way of background, both state and federal laws require that amounts awarded as bonuses be included in determining a non-exempt employee’s overtime rate, except in the case of discretionary bonuses.  This means that when the employee works overtime hours and receives a non-discretionary bonus, this bonus program will increase the non-exempt employee’s hourly rate for calculating overtime.

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Relearning the ABCs: California Supreme Court Adopts New Independent Contractor Test

Last week, in Dynamex Operations West, Inc. v. Superior Court, 2018 WL 1999120 (Apr. 30, 2018) (Dynamex), the California Supreme Court upended the prevailing understanding of the independent contractor-employee distinction under California law. In a ruling that is certain to have wide-ranging repercussions for companies that rely on independent contractors, the Court declined to apply the multi-factor common law test derived from its 1989 decision in S.G. Borello & Sons, Inc. v. Dep’t of Indus. Rel’ns, 48 Cal. 3d 341 (1989) (Borello) to the question of whether a worker is an “employee” subject to the minimum wage and overtime protections of the California Industrial Welfare Commission’s (“IWC”) wage orders. Instead, the Court adopted a simple, three-part test that likely will expand the wage orders’ reach.

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