In 2018, the California Legislature passed a number of laws relating to employment and the workplace, including laws influenced by the #MeToo movement. Several of these new laws may affect employers’ day-to-day operations and require a review of employer policies and procedures to ensure continued compliance. The following are new laws that may be of particular interest to employers in the homebuilding industry.
Unlawful Discrimination and Harassment (SB 1300). AB 1300 implements numerous, wide-ranging changes to the Fair Employment and Housing Act (FEHA) with respect to workplace harassment claims. As one example, the new law prohibits employers from requiring that an employee release claims or rights under the FEHA or sign a nondisparagement agreement, in exchange for a raise or bonus, or as a condition of employment. This prohibition does not apply to a negotiated settlement agreement. Employers also may, but are not required to, provide bystander intervention training that would assist bystanders in recognizing potentially problematic behaviors. Employers should consider reviewing their employee agreements and policies to ensure compliance with all of SB 1300’s requirements and restrictions.
Sexual Harassment Training (SB 1343). Current law requires that employers with 50 or more employees provide sexual harassment prevention training to all supervisors in California. SB 1343 expands this training requirement by requiring employers with five or more employees, including seasonal and temporary employees, to provide at least two hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every two years thereafter.
Confidentiality Clauses in Settlement Agreements (SB 820). For settlement agreements entered into on or after January 1, 2019, SB 820 prohibits and makes void provisions that prevent individuals from disclosing facts relating to claims filed in civil or administrative actions regarding acts of sexual assault, sexual harassment, and workplace harassment based on sex. However, at the claimant’s request, provisions shielding the identity of the claimant and all facts that could lead to his or her discovery may be included within a settlement agreement, provided a government agency or public official is not a party to the agreement. Employers using employee severance or separation agreements will need to ensure their forms are compliant with the new limitations.
Defamation Protection (AB 2770). To ensure that victims of sexual harassment and employers will not be sued for defamation by the alleged perpetrator, AB 2770 extends the litigation privilege (which protects statements made in conjunction with judicial proceedings) to complaints of sexual harassment. This includes complaints by an employee to an employer that are made without malice, as well as communications between the employer and interested persons (such as witnesses), regarding a complaint of sexual harassment.
Gender Representation on Boards of Directors (SB 826). SB 826 requires that any publicly held corporations whose principal executive offices are located in California have a minimum of one female director on its board of directors by the end of 2019. By the end of 2021, if a corporation has five directors, the law increases that minimum number to two female directors, or if a corporation has six or more directors, the minimum number of female directors must be three.
Construction Contractor Liability for Wage and Benefit Payments to Subcontractor Employees (AB 1565). In 2016, AB 1701 imposed on prime contractors on private works of construction liability for employee wage, fringe and other benefit payments owed to a wage claimant that is incurred by a subcontractor of any tier acting under, by, or for the contractor. In response, many contractors and owners revised their subcontract forms to address this significant new liability, including imposing broad disclosure obligations on subcontractors. For contracts entered into on or after January 1, 2019, AB 1565 requires that a contract with a subcontractor identify the specific documents or information that the subcontractor will be required to produce before disputed amounts can be withheld from the lower-tiered subcontractor. Owners and contractors should review their subcontract forms to ensure that subcontractor disclosure obligations are sufficiently specific to comply with AB 1565.
Skilled and Trained Workforce (AB 3018). Existing statutes impose skilled and trained workforce requirements on various types of construction projects by public agencies, requiring that a certain percentage of the skilled journeypersons employed to perform work on the contract or project by every contractor and each of its subcontractors at every tier are graduates of an apprenticeship program for the applicable occupation. The percentage in 2019 will be 50 percent and will rise to 60 percent in 2020. AB 3018 imposes new penalties on contractors and subcontractors that fail to meet skilled and trained workforce requirements. For initial violations, penalties up to $5,000 per month may be imposed, with a second or subsequent violation within a three-year period resulting in penalties up to $10,000 per month. A contractor or subcontractor found by the Labor Commissioner to be in violation of this chapter with intent to defraud is also subject to disbarment from public works for a period of one to three years. In the event monthly reports of skilled and trained workforce compliance are not provided as required, AB 3018 also provides that public agencies shall withhold an amount equal to 150 percent of the value of the monthly billing for the entity that failed to comply. Owners, contractors and subcontractors with projects subject to skilled and trained workforce requirements should consider planning in advance of construction to meet the requirements since sufficiently qualified labor may be limited.
Paid Family Leave Expansion (SB 1123). Paid Family Leave (PFL) is a state program funded by employee contributions that provides short-term benefits to workers who experience a loss of wages while caring for a seriously ill family member or to bond with a new child. Beginning January 1, 2021, SB 1123 expands PFL by providing benefits to employees to take time off to participate in a “qualifying exigency related to the covered active duty or call to covered active duty of the individual’s spouse, domestic partner, child or parent” in the United States armed forces. These activities include attendance in a military ceremony or program, arranging for alternative child care when the active duty or call to active duty necessitates a change in child care arrangements, and attending counseling. Human resources personnel should be prepared to properly advise employees of their PFL rights.