Vigilant Blog

News, trends and analysis in employment law, HR, safety & workers' comp

Oct 21, 2011

CALIFORNIA: Governor signs 2011 employment-related bills


Governor Jerry Brown recently signed into law a number of bills that affect the workplace. They all take effect on January 1, 2012.


No mandatory E-Verify: Employers cannot be required by the state of California or any city or county in California to participate in the federal E-Verify program (AB 1236). E-Verify is an online program that allows employers to check the employment eligibility of new hires. It can be a useful tool, but only if the employer is willing to commit the staff time to learn and follow the E-Verify procedures.


Health insurance coverage for pregnant employees: Employees who take leave under California’s pregnancy disability leave law are entitled to continue their group health insurance coverage under the same terms and conditions as if they had continued to work (SB 299). This type of leave is available for up to four months in a 12-month period. From a legal standpoint, Vigilant believes this law is preempted by ERISA, a federal law regulating group health plans. The reality, however, is that it is unlikely an employer will want to be the test case to challenge the new law. In related legislation that was signed by the governor, both individual and group health insurance plans must provide coverage for “maternity services,” which includes pretty much all aspects of pregnancy and childbirth, from prenatal care all the way up through delivery and postpartum care (SB 222 and AB 210).


No interference with CFRA or pregnancy leave: This clarifies existing law to say that it is an unlawful employment practice to interfere with, restrain, or deny an employee’s attempt to take leave under the California Family Rights Act (CFRA) or California pregnancy disability leave law (AB 592).





Limits on looking into credit history: Employers’ ability to request credit history (financial information) for employment purposes will be strictly limited to certain types of jobs (AB 22).  In the private sector, the jobs where you may request credit history for employment purposes will be limited to managerial positions (executives who are exempt from overtime under state law); positions where the report is required by law; positions (other than retail positions involving routine solicitation and processing of credit card applications) that involve regular access to bank or credit card account information, social security numbers, and dates of birth; positions where the person is a named signatory on the employer’s bank or credit card account, or is authorized to transfer money or enter into financial contracts on the employer’s behalf; positions that involve access to confidential or proprietary information that is economically valuable and reasonable to keep secret; positions involving regular access to cash totaling $10,000 or more during the workday; and positions in financial institutions subject to the Gramm-Leach-Bliley Act regarding safeguarding of personal information. In addition, the notice that you give to the individual informing them that you will be requesting a credit report will have to identify the specific exemption that allows you to request the report.


Unions for agricultural workers: It will be easier for agricultural workers to form a union under California state law (SB 126). The federal National Labor Relations Act (NLRA) doesn’t apply to agricultural workers.


Gender identity and gender expression protected: Employees and applicants will be protected from discrimination on the basis of gender identity or gender [removed]AB 887). You should consider updating your employee handbook to include these in your equal employment opportunity policy.


Health insurance coverage for same-sex spouses and domestic partners: Group health care service plans and policies offered in California must treat same-sex spouses and domestic partners the same as opposite-sex spouses and domestic partners (SB 757). There is an exception for policies issued outside of California to employers whose principal place of business and majority of employees are located outside the state.

Penalties for misclassifying employees as independent contractors:  Anyone who willfully misclassifies an employee as an independent contractor is subject to civil penalties between $5,000 and $15,000 per violation ($10,000 to $25,000 if the misclassification is deemed to be a consistent pattern or practice). The same penalties apply if you charge the misclassified individual a fee or deduct from their wages for something that you wouldn’t have been able to deduct if they were properly classified as an employee. Also, an individual who receives payment in exchange for advising an employer to misclassify a worker is jointly and severally liable (i.e., they share the employer’s responsibility for paying the penalties and could be on the hook for the full amount if the employer doesn’t pay it). There are two exceptions: individuals (such as HR people) who are advising their own employer, and attorneys who are providing legal advice (SB 459).




This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.