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California Employees' Past, Even When Easily Found, May be Off-Limits Now

by
Gordon W. McNamee
on
3/22/2018
California Employees' Past, Even When Easily Found, May be Off-Limits Now

California has for decades been a far friendlier place for labor and employees than many other locations in the country. Regardless of also being the birthplace of the temp-worker and Silicon Valley's paradigm of IT contractor-for-hire services, the state has spent the last 20 years leaning closer to greater employee protections, while the rest of the country has been moving in the opposite direction. With the latest laws passed by the Legislature in the 2017 Session and taking effect on January 1, now employers are being cast as both protectors of their staff from the government as well as purposefully blinded from their history.

The particular changes to pay attention to include decisions based on past salary history or past criminal history, protection of federal immigration agents and agencies, increased liability for subcontractors, new parental leave protections, employee retaliation protections, and required sexual harassment training:

  • Salary history has long been a factor in gauging how much to pay a new hire. After all, many employers have not been compelled to pay more than necessary when a new recruit comes in at 20 percent lower than the one that left the same role. However, under AB 168, employers in California are barred from requiring salary history or making a hiring decision based on someone's prior pay. Further, employers now need to provide a pay scale for a position being filled if asked by an applicant.
  • AB 450 was in direct response to new aggressive tactics by the federal government to find and deport illegal immigrants. Not only did California establish itself as a sanctuary state, it also barred employers from voluntarily cooperating with federal immigration outside of what is required specifically under federal law.
  • Prior criminal history has long been a primary factor for eliminating potential hires with problem pasts. However, now, under AB 1008, the employer has to review and consider applicants at a higher level, not using a criminal past as a factor unless found through an objective process, and a determination has to be made that the past has a direct relation to negatively impacting the company if the person is hired. A good example would be a person convicted of embezzlement being considered for an accounting position handling payments; clearly, the embezzlement risk can be logically associated with a concern about the new employer's payments being protected. However, general discrimination on simply having a criminal past is not enough anymore.
  • AB 1701 recast the relationship between subcontractors and employers who have long treated such parties as contractual partners and no more. Now, the state beefed up the requirements on companies who used subcontractors to complete projects, typically in the construction and repair industry. These new requirements are in response to many repeat issues where property owners have been held responsible for unpaid wages to subcontractors, while the companies hiring them have walked away from their obligations. Now, all employers are feeling the penalty.
  • Parental leave for new parents has been augmented under SB 63, specifically barring employers from refusing to pay health coverage for employees on parental leave, refusing to let an employee go on parental leave, and failing to provide a parental leave benefit to qualified employees.
  • SB 306 beefed up penalties and investigative powers on employers who have engaged on retaliation towards employees or dismissed employees due to their participating in protected activities.
  • Finally, SB 396 placed a new, stronger requirement on employers to ensure staff receive sexual harassment training for the workplace. Staff who are employed by companies or agencies with 50 or more personnel must be trained every two years. And the training is far more than just gender discrimination, now including transgender rights, gender expression and sexual orientation.

Again, California is unique for increasing penalties on employers not protecting staff up to the state's statutory standards. Given the changes, many companies need to make sure they have made the required modifications need to stay in compliance, or they may very well be in for a rough surprise with a new investigation out of the blue.

Gordon W. McNamee, CPA writes for TaxBuzz, a tax news and advice website. Reach him and his team at [email protected].

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Gordon W. McNamee

Gordon W. McNamee

Gordon W. McNamee is a Certified Public Accountant (CPA) based in Rancho Cucamonga, CA. Gordon W. McNamee can assist you with your tax return preparation, payroll, accounting and tax planning needs. <br /> <br /> 2021 is Gordon W. McNamee, CPAs 38th year in the profession. As as a former IRS agent (1984 through 1987), Gordon has been in public accounting since 1987. Gordon specializes in individual, corporate, HOA, trust, estate and payroll taxes. He also prepares financial statements and provides accounting & bookkeeping services. He enjoys making his clients feel at ease while providing a personalized professional service.

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