Reminder to California Employers: A Number of Changes Take Effect on July 1

Employers doing business in California are reminded that a number of laws will take effect in California on July 1, 2017, that will impact a wide range of employment practices, from background checks to minimum wage to paid sick leave.

In addition, the California Department of Fair Employment and Housing (“DFEH”) has issued new regulations that provide guidance on the protections for transgender employees under the Fair Employment and Housing Act (“FEHA”). While an employer will not necessarily need to update any policies as a result of the new regulations, they may impact the various procedures in place at the employer’s California worksites. Therefore, employers should be mindful of the regulations, which also take effect on July 1, 2017.

Below is a summary of these impending changes.

The Los Angeles Ban-the-Box Ordinance

As discussed in our prior Act Now Advisory and blog post, the city of Los Angeles passed the Fair Chance Ordinance (“Ordinance”) in January 2017. The Ordinance prohibits employers and city contractors operating within the city of Los Angeles from seeking a job applicant’s criminal history until after a conditional offer of employment is extended. Employers were given until July 1, 2017, to comply with the terms of the Ordinance before penalties and fines would be enforced. Penalties for violations may be assessed at up to $500 for the first violation, up to $1,000 for the second violation, and up to $2,000 for subsequent violations. The city may then, at its discretion, distribute a maximum of $500 from that penalty directly to the applicant.

In order to avoid being assessed penalties, employers should be sure to do the following:

• Eliminate questions about criminal history from employment applications for any position in Los Angeles—including telecommuting positions where the employee works from a home office in the city.
• Include notices of compliance with the Ordinance on job postings.
• Post a notice regarding the provisions of the Ordinance at each workplace or job site in Los Angeles, and, where applicable, provide a copy of a notice to any labor union or representative of workers with which there is a collective bargaining agreement or other agreement or understanding.
• Make offers of employment contingent upon completion of the criminal background check process before requesting an applicant’s criminal history.
• If the applicant’s criminal history causes you to want to withdraw the conditional offer of employment, begin the Fair Chance Process, as outlined in the Ordinance and described in our Advisory, before withdrawing the conditional offer of employment.
• Retain all records related to your compliance with the Ordinance for positions located within Los Angeles for at least three years.

Transgender Identity and Expression Regulations

Recently issued DFEH regulations provide additional guidance to employers on the scope of FEHA prohibitions against gender identity discrimination and gender expression discrimination, particularly as it pertains to transgender individuals. For the most part, these new regulations echo longstanding sex discrimination principles, but the new regulations explicitly extend those principles to protect transitioning and transgender persons. The guidance focuses on areas such as restroom use, fringe benefits, working conditions, dress code requirements, and requests for (and documentation of) an employee’s sex, gender, gender identity, or gender expression. To the extent that some employers may currently have different practices or procedures in place, they should be mindful of the new regulations and revise any relevant protocols or procedures.

The new regulations revise the definitions of a number of terms pertaining to sex discrimination, including “gender expression,” “gender identity,” and “transgender,” and add a definition for “transitioning”:

• “Gender expression” is defined as an individual’s “gender-related appearance or behavior, or the perception of such appearance or behavior, whether or not stereotypically associated with the person’s sex assigned at birth.”
• “Gender identity” is “each person’s internal understanding of their gender, or the perception of a person’s gender identity, which may include male, female, a combination of male and female, neither male nor female, a gender different from the person’s sex assigned at birth, or transgender.”
• A “transgender” person is any individual “whose gender identity differs from [his or her] sex assigned at birth. A transgender person may or may not have a gender expression that is different from the social expectations of the sex assigned at birth. A transgender person may or may not identify as ‘transsexual.’”
• “Transitioning” is “a process some transgender people go through to begin living as the gender with which they identify, rather than the sex assigned to them at birth. This process may include, but is not limited to, changes in name and pronoun usage, facility usage, participation in employer-sponsored activities … or undergoing hormone therapy, surgeries, or other medical procedures.”

Under these definitions, an individual is afforded protection from discrimination based on how he or she “internally” perceives his or her gender; he or she does not need to make an affirmative outward act toward transitioning to be protected from discrimination.

In addition to defining these key terms, the new regulations address a number of “working conditions” and dress code standards that must be followed. These practices address topics that can be of particular concern to transgender or transitioning individuals:

• Restrooms: Employers must provide equal access to all restroom facilities, regardless of the sex of an employee, as he or she must be permitted to use facilities based on his or her identified or expressed gender. Any single-occupant facilities under an employer’s control must use gender-neutral signage, and employers cannot require proof of sex or gender from an employee to use any particular facility. The new regulations also expressly require employers to “provide feasible alternatives such as locking toilet stalls, staggered schedules for showering, shower curtains, or other feasible methods of ensuring privacy. However, an employer or other covered entity may not require an employee to use a particular facility.” Note that employers are entitled to make “reasonable and confidential” inquiries of an employee “for the sole purpose of ensuring access to comparable, safe, and adequate multi-user facilities.”
• Dress Codes: Employers cannot enforce a dress code that requires employees to dress or groom themselves in a manner inconsistent with their stated gender identity or expression, absent a showing of a bona fide occupational qualification (“BFOQ”).
• Names/Pronouns: Employers must also comply with an employee’s request to be addressed by a certain gender, name, and/or pronoun; employers may only require the use of the employee’s gender or legal name as indicated in a government-issued identification document (if different than the employee’s requested gender or legal name) if there is a legally mandated obligation to do so.
• Documentation of Gender: Employers cannot require employees to identify or disclose their gender, which includes questions on job applications and other employment-related paperwork, unless there is a BFOQ that would permit such an inquiry.

Other Significant Changes

The following changes will also take effect on July 1, 2017:

• Minimum Wage Increases:
  • Emeryville: $15.20/hour for businesses with 56 or more employees; $14/hour for businesses with 55 or fewer employees.
  • City of Los Angeles: $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
  • Los Angeles County (unincorporated areas only): $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
  • Malibu: $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
  • Milpitas: $11 an hour.
  • Pasadena: $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
  • San Francisco: $14 an hour.
  • San Jose: $12 an hour.
  • San Leandro: $12 an hour.
  • Santa Monica: $12/hour for employers with 26 or more employees; $10.50 an hour for employers with 25 or fewer employees.
• Local Leave Laws:
  • Employers with 25 or fewer employees had a one-year grace period to begin complying with the city of Los Angeles’s Paid Sick Leave Ordinance, which passed last year; they will be required to comply beginning July 1, 2017. As a reminder, the Los Angeles Paid Sick Leave Ordinance is more generous than California’s paid sick leave requirement. Under the ordinance, employers must either frontload the greater of six days or 48 hours of sick leave or provide one hour of sick leave for every 30 worked up to a cap of 72 hours. Please see our prior Advisory for further information.
  • Employers with 35 or more employees must begin complying with San Francisco’s Paid Parental Leave Ordinance. The ordinance, which already applies to larger employers, requires employers that have employees working in San Francisco to provide supplemental compensation to employees who are receiving California Paid Family Leave benefits to bond with a new child, so that the employees receive up to 100 percent of their normal weekly wages (up to a cap) during six weeks of parental leave. See our Employment Law This Week segment and prior blog post for more information on this ordinance.
• Emeryville’s Fair Workweek Ordinance: This ordinance, which was passed last November, applies to (i) retail firms with 56 or more employees globally and (ii) fast-food firms with 56 or more employees globally and 20 or more employees within the city limits of Emeryville. Under the ordinance, covered employers must do the following:
  • Provide employees with work schedules two weeks in advance.
  • Provide employees with notice of any change to their work schedule.
  • Allow an employee to decline any previously unscheduled work hours for which the employee has not been provided two weeks’ notice.
  • Provide employees with additional compensation for certain schedule changes.
  • Offer extra hours to existing part-time employees before hiring new staff.
  • Comply with notice and posting requirements, and avoid retaliating against employees who exercise the rights provided by the ordinance.

All employers should confirm that they have made any necessary policy or procedure adjustments in anticipation of these impending changes in the law.