Authors | Jillian A. Berk, Wendy E. Lane, Kelly M. Raney
Greenberg Glusker's Employment Law Group has issued a comprehensive mid-year update on topics of particular importance for employers, including:
- The DFEH Finally Publishes its Free Sexual Harassment Training Materials for Non-Supervisory Employees
- Local Minimum Wages Increase on July 1, 2020
- New FEHA Restrictions on Pre-Employment Hiring Practices Effective July 1, 2020
- New Overtime Rules Under the FLSA
- Paid Family Leave Benefits Expand Effective July 1, 2020
The DFEH Finally Publishes its Free Sexual Harassment Training Materials for Non-Supervisory Employees
As we first discussed in a client alert in late 2018, California passed legislation for 2019 requiring that all employers of five or more employees provide one hour of sexual harassment and abusive conduct prevention training to nonsupervisory employees, and two hours of sexual harassment and abusive conduct prevention training to supervisory employees, once every two years. The legislation expanded preexisting law which only required employers with 50 or more employees to provide at least two hours of training and education regarding sexual harassment to supervisory employees. It further required the Department of Fair Employment and Housing (“DFEH”) to offer free on-line training that satisfies the statutory training requirements.
As originally passed, the legislation set a training deadline of January 1, 2020, for non-supervisory employees. Last fall, the Legislature extended the non-supervisory training deadline to January 1, 2021.
After over a year of anticipation, the DFEH recently announced that it has published free online training that satisfies this requirement for non-supervisory employees. Training is offered in English, Spanish, Korean, Chinese, Vietnamese, and Tagalog, and there is also a closed caption feature.
According to the free online training page, the DFEH will publish its online training for supervisory employees by July 30, 2020.
On July 1, 2020, local governments throughout California will raise their minimum wage. In the City of Los Angeles and the unincorporated areas of the County of Los Angeles, Malibu, and Santa Monica, the new rate is $15.00 for employers with 26 or more employees, and $14.25 for employers with 25 or fewer employees.
Employers whose employees work in localities that have not set their own minimum wage must continue to apply the State of California’s minimum wage requirement, which is currently $13.00 per hour for employers with 26 or more employees and $12.00 per hour for employers with 25 or fewer employees.
A summary of the local minimum wage rates which are increasing on July 1, 2020, is below:
Employers with 25 or fewer employees
Employers with 26 or more employees
City of Los Angeles
County of Los Angeles
26-99 employees: $14.00
City and County of San Francisco
As we shared in our 2019 year-end client alert, an increase in the municipal/local minimum wage does not affect the minimum wage that is to be used for the salary-basis test for California’s exemption classifications. Employers should continue to use the state’s minimum wage for the purpose of determining whether employees are earning at least twice the minimum wage.
Taking effect on July 1, 2020, are new Fair Employment and Housing Act (FEHA) regulations pertaining to pre-employment practices related to applications, advertising and interviewing, which are designed to prevent employers from screening out applicants based on age, medical conditions, disability, and religion.
Effective July 1, 2020, employers cannot request scheduling information from a job applicant without clearly communicating that the applicant is not required to disclose scheduling restrictions based on legally protected grounds. The new regulations suggest the following language: “Other than time off for reasons related to your religion, a disability, or a medical condition, are there any days or times when you are unavailable to work?” or “Other than time off for reasons related to your religion, a disability, or a medical condition, are you available to work the proposed schedule?”
This restriction applies to both written and oral requests for scheduling information, so employment applications should be reviewed and updated accordingly, and employees responsible for hiring should be informed of this change and appropriately trained.
This new regulation also prohibits the use of online application technology that limits or screens out applicants based on their schedule, since this technology may disproportionally impact applicants based on religion, disability, or medical conditions. If this technology is necessary for an employer’s business, the employer must include a mechanism in the online application to allow the applicant to request an accommodation. Keep in mind this likely applies to third-party employment website vendors, such as Monster or Indeed. If these third-party vendors are not located in California, they may not be in compliance with this regulation.
Under existing law, employers cannot refuse to consider applicants because they are age 40 or older. The new regulations provide examples of unlawful requirements for job applicants, which include: a maximum experience limitation; a requirement that candidates be “digital natives” (individuals who grew up using technology from an early age); or a requirement that candidates maintain a college-affiliated email address.
The new regulations make it unlawful for an employer to advertise an employment opportunity in a manner that a reasonable person would see as deterring or limiting employment of people age 40 or older. Examples of prohibited advertisements include those that designate a preferred applicant age range or that include terms such as “young,” “college student,” “recent college graduate,” “boy,” “girl,” or other terms that imply a preference for employees under the age of 40.
The new regulations provide examples of pre-employment inquiries which may be considered discriminatory based on age, including asking a job applicant about age, date of birth or graduation dates. These prohibitions apply to written and oral inquiries, including on job applications, phone screenings, and interviews.
Employers are also prohibited from using online job applications that require applicants to enter their age in order to complete an application. They are similarly prohibited from using drop-down menus that contain age-based cut-off dates or utilize automated selection criteria or algorithms that have the effect of screening out applicants age 40 or older.
Presumption of Discrimination Based on Age
Under the new regulations, there will now be a presumption of discrimination whenever any facially-neutral employment practice (and not just those related to pre-employment applications) has an adverse impact on an applicant or employee age 40 or older. Employers may be excused if the practice is job-related and consistent with business necessity. Notably, in the context of layoffs or salary reductions that negatively impact employees age 40 or older, an employer’s preference to keep a lower paid worker is, by itself, insufficient to defeat the presumption of discrimination.
Finally, even job-related employment practices that are consistent with business necessity but which adversely impact applicants or employees age 40 or older may still be impermissible if it is shown that an alternative practice could accomplish the business purpose equally well with a lesser discriminatory impact.
The federal Fair Labor Standards Act (“FLSA”) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments. However, California’s wage and hour laws are more stringent than the FLSA. Because employers must comply with whichever law (state or federal) is more favorable to the employee, California employers should consult counsel when determining if FLSA rules apply.
On May 18, 2020, the U.S. Department of Labor announced a final rule to withdraw the partial lists of businesses that either do not or may have a partial “retail concept” under the FLSA as it relates to overtime pay for commissioned retail employees.
Under Section 7(i) of the FLSA, some employees in retail industries can be classified as exempt from overtime pay if they are paid primarily on a commission basis. Previously, there were lists, which have now been withdrawn, designed to help employers decide if they met the definition of a traditional “retail establishment.” One list identified establishments that had “no retail concept,” and included, for example, construction companies, real estate companies, and accounting firms. The other list identified industries with a “partial retail concept” and included, for example, restaurants and department stores. These lists became outdated and confusing with the evolution of the retail business model in the United States, especially for industries that moved away from brick and mortar to online platforms.
Now that the lists have been withdrawn, businesses will not be categorically prohibited from asserting they qualify as “retail” just because they fall into a category on the non-retail list. The Department of Labor says that moving forward, it will treat and evaluate “all establishments equally under the same standards.”
On May 20, 2020, the Department of Labor announced a final rule that allows employers to pay bonuses or other incentive-based pay to salaried, nonexempt employees whose hours vary from week to week. The final rule clarifies that payments in addition to the fixed salary are compatible with the use of the fluctuating workweek method under the FLSA.
This additional incentive pay (e.g., bonuses, premium payments, hazard pay, etc.) must be included in the calculation of a fluctuating workweek employee’s regular rate of pay for overtime purposes (unless excludable under certain FLSA sections).
According to the Department of Labor, the rule “grants employers greater flexibility to provide bonuses or other additional compensation to nonexempt employees whose hours vary from week to week and eliminates any disincentive for employers to pay additional bonus or premium payments to such employees.”
As we forecast in our client alert at the end of last year, beginning on July 1, 2020, California will extend the maximum duration of Paid Family Leave from six weeks to eight weeks. California Paid Family Leave (“PFL”) provides partial wage reimbursement to employees who need to take time off from work to care for a seriously ill family member (child, parent, parent-in-law, grandparent, grandchild, sibling, spouse, or registered domestic partner) or to bond with a new child entering the family through birth, adoption, or foster care placement. PFL is funded entirely through withholdings from employees’ paychecks. Employees can apply with the Employment Development Department to receive PFL payments.
The PFL program is not a leave right and does not provide job protection. However, other state and federal laws such as the federal Family and Medical Leave Act (FMLA), the California Family Rights Act (CFRA), the New Parent Leave Act, and the Families First Coronavirus Response Act can provide such protected leave for eligible employees.