New Employment Laws in 2017


During the year of 2016, while most of us watched the progression of one of the most historic elections in U.S. history, the California State Legislature was hard at work. Last year, the California State Legislature sent over one thousand pieces of legislation to Governor Jerry Brown. The Governor signed 898 of them into law, many taking effect January 1, 2017. Below is a summary of some of the most important new laws employers need to be aware of:

AB 1676 and SB 1063 – Fair Pay

The Fair Pay Act currently prohibits employers from paying an employee at wage rates less than the rates paid to the opposite sex at the same establishment for substantially similar work under similar working conditions, unless the payment is based on a genuine factor other than sex. Assembly Bill 1676 expands this protection in that it specifies that prior salary, cannot, by itself, justify any disparity in compensation.

Senate Bill 1063 expands the Fair Pay Act to race and ethnicity: employers are prohibited from paying any of its employees at wage rates less than the rates paid to employees of another race or ethnicity for substantially similar work under similar working conditions. Both of these laws are effective January 1, 2017.

AB 2899 – Challenging Minimum Wage Violations

Under existing law, an employer who pays less than the applicable minimum wage is subject to a civil penalty and other damages. Those against whom a citation is issued can request a hearing to contest the penalties. This Assembly Bill requires that any employer that appeals a decision by the Labor Commissioner relating to a violation of wage laws must file a bond with the Labor Commissioner that covers the total amount of any minimum wages, liquidated damages, and overtime compensation owed, excluding penalties. The total amount of the bond is to be forfeited to the employee if the employer fails to pay the amounts owed within 10 days from the conclusion of the proceedings. This law is effective January 1, 2017.

AB 2535 – Itemized Wage Statements

Current law requires an employer to provide his or her employee an accurate itemized statement in writing containing specified information including the total hours worked by the employee, unless the employee’s compensation is based on a salary and the employee is exempt from payment of overtime. Assembly Bill 2535 specifies that employers need not list the total hours worked on wage statements for employees that are exempt from payment of minimum wage and overtime under specified statutes or any applicable order of the Industrial Welfare Commission. This is effective January 1, 2017.

AB 0488 – Protection for Disabled Employees

Under existing law, the California Fair Employment and Housing Act (“FEHA”) prohibits employers from discrimination or harassment on account of race, religion, disability, sex, and age, among other characteristics. Certain employers of nonprofit sheltered workshops, day programs, and rehabilitation centers operate under a special license that permits the employment of individuals with disabilities at a wage less than the minimum wage. Before AB 0488 was passed, employees who worked in sheltered workshops and rehabilitation centers were excluded from FEHA protection. This meant that workers with disabilities who were employed in these settings had no recourse for discrimination by their employer based on characteristics like race, religion, or gender identity.

The new bill authorizes an individual employed under a special license in a sheltered workshop, day program, or rehabilitation facility to bring an action under FEHA for any form of harassment or discrimination prohibited by the act. The bill, however, also provides employers with a defense if the challenged action was permitted by law and was necessary to serve employees with disabilities under a special license. The new law also exempts specially-licensed employers that hire a qualified individual at a wage less than the minimum wage from FEHA’s provisions prohibiting discrimination based on disability.  This law is effective January 1, 2017.

AB 2337 –Rights of Domestic Violence, Sexual Assault, and Stalking Victims

Existing law prohibits an employer from discriminating against an employee who is a victim of domestic violence, sexual assault, or stalking for taking time off work for that reason. Employees who are discharged or otherwise discriminated against for this reason are entitled to reinstatement or reimbursement for lost wages, and possibly other relief.    

Assembly Bill 2337 requires employers to inform each employee of his or her rights to be free from discrimination as a victim of domestic violence, sexual assault, or stalking by providing specific information in writing to new employees upon hire, and to other employees on request. The Labor Commissioner is charged with developing the written form providing said notice on or before July 1, 2017. Employers are not required to provide notice until the Labor Commissioner posts the form.

SB 1241 – Employment Agreements

While enforcing forum selection and choice of law clauses in California was previously difficult for employers, Senate Bill 1241 made it even more challenging. This bill prohibits an employer from requiring an employee, who resides and works in California, as a condition of employment, to agree to a provision that would either require the employee to litigate or arbitrate employment disputes outside California or under the laws of another state. The law applies to contracts entered into, modified, or extended on or after January 1, 2017. The only exception is where the employee was individually represented by a lawyer in negotiating an employment contract. Any contract that violates these provisions is voidable by the employee, who may be awarded reasonable attorney’s fees, among other remedies, for enforcing these rights. This law is effective January 1, 2017.

AB 1843 – Juvenile Criminal History

Current law prohibits an employer from asking an applicant to disclose information about an arrest or detention that did not result in a conviction, about a sealed or dismissed conviction, or about participation in pretrial or post trial diversion programs, subject to certain exceptions. The law also prohibits an employer from utilizing any of this information as a factor in determining any condition of employment.

Assembly Bill 1843 expands this law to prohibit employers from asking an applicant to disclose any information regarding juvenile convictions and seeking or utilizing any information relating to juvenile arrests, detentions, or court dispositions as a factor in an employment determination. Certain exceptions exist for employers at health facilities. This law is effective January 1, 2017.

AB 1661 – Sexual Harassment Training

Prior to this bill, the law required that all local agency officials receive training in ethics. It also required that civil or political subdivisions of the state and all cities to provide at least 2 hours of training and education regarding sexual harassment to all supervisory employees. Assembly Bill 1661 requires that local agency officials also receive sexual harassment prevention training and education within the first six months of taking office. Local agency officials must receive training once every two years. A different bill previously established similar provisions for the workplace. This bill, which is effective January 1, 2017, could be a result of various high-profile sexual harassment cases against elected officials.

These are not all, but are some of the most important new employment laws effective in 2017. If you have any questions about how these new laws may affect your business, the attorneys at Schwartz Semerdjian are available to assist California businesses with employment law issues. Please contact Ross Schwartz, Dick Semerdjian, Sarah Evans or Sierra Spitzer.