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NCHR-SD Employment Law Update

April 2018



That rumbling sound you hear is a steamroller and it is coming for you straight from Sacramento. It is the new bevy of progressive labor bills pending in the state legislature. Below you will find a rundown of the most significant bills; none have passed so far.

You should know that the state labor agency has increased its pace of worksite enforcement actions. The article below gives you some tips on how to prepare.

Employee medical privacy is a continuous concern for employers. Our third article below gives you a summary of the law and a few practical suggestions. 

By Chris Olmsted, Legislative Chair

Ogletree, Deakins, Nash, Smoak & Stewart, P.C.





California Legislature Pounces On Employers

With A Progressive 2018 Agenda


With the hungry relish of a pride of lions flashing teeth and fangs, the California legislature is on the hunt in 2018. As has become an annual spring ritual, Sacramento politicians have once again proposed a progressive labor agenda.

Below is a list of significant employment law bills pending in Sacramento. It remains to be seen which of these bills will end up on Governor Jerry Brown’s desk in about six months’ time.


Marijuana Smoker Rights

AB 2069 proposes to amend the California Fair Employment and Housing Act (FEHA) to extend anti-discrimination protection to medical marijuana users.

This bill would prohibit an employer from engaging in employment discrimination against a person on the basis of his or her status as, or positive drug test for cannabis by, a qualified patient or person with an identification card.

The bill would not prohibit an employer from refusing to hire an individual or discharging drug using employee if hiring or failing to discharge an employee would cause the employer to “lose a monetary or licensing-related benefit under federal law.”

The bill would also provide that it does not prohibit an employer from terminating the employment of, or taking corrective action against, an employee who is caught on the job under the influence of marijuana.

Female Quotas For Corporate Boards

AB 826 proposes that publically traded California corporations must appoint a required number of women to its board of directors.

This bill would require that by the end of 2019, publically held California corporations with a principal place of business in the state must include at least one woman on the board. By 20201, that number would increase to 2 or 3, depending on the total number of directors on the board.

Annual Pay Equity Data Reporting

AB 1284 proposes that California corporations be required to annually report pay data to the state labor agency. 

The bill would require that beginning in September 2019, employers with 100 or more employees must submit annual pay data for employees in 10 job categories including executive, administrative, sales, technicians, laborers, and other positions. The pay data would be further categorized by race, ethnicity and sex.

Increases in Paid Sick Leave

AB 2841 proposes to increase the minimum amount of sick pay an employer must provide under the California paid sick leave law.

 Employers who provide paid sick leave in an annual lump sum would be required to increase the allocation to 40 hours, from 24 hours under current law. Additionally, where the employer provides sick pay on an accrual basis, the accrual cap would be increased to 80 hours, from 48 hours under current law.

Expanded Sex Harassment Prevention Training

SB 1343 would amend the current California sexual harassment prevention harassment training requirement so that most companies would be required to provide it to all employees. Currently, only employers with 50 or more employees must provide the training, and only supervisors are required to receive it.

The bill proposes that beginning in 2020, any employer with 5 or more employees must provide two hours of harassment prevention training every two years to all supervisory and all non-supervisory employees. The employer could develop its own training, or as an alternative, the state will publish an online video which could meet this obligation.

Records Retention of Sexual Harassment Complaints

AB 1867 would require any employer with 50 or more employees to maintain records of employee complaints of sexual harassment for 10 years from the date of filing.

Leave of Absence for Sexual Harassment Victims

AB 2366 would amend Labor Code sections 230 and 230.1, which give protected status to victims of domestic violence, sexual assault, or stalking. Under current law, an employer must accommodate a victim’s need for leaves of absences for specified purposes and may not discriminate or retaliate against such employees.

The bill proposes to extend the same protections to employees who are victims of sexual harassment. The bill would also add protection to employees who are immediate family members of victims of domestic violence, sexual assault, stalking or sexual harassment. 

Prohibition Against Confidential Sexual Harassment Settlements

SB 820 would prohibit confidential settlement agreements relating to sexual harassment claims.

This bill would provide that, a provision in a settlement agreement that prevents the disclosure of factual information relating to a sexual harassment legal action is prohibited, unless the employee requests the inclusion of such a provision, if the legal pleadings state a cause of action relating to specified claims of sexual assault, sexual harassment, or harassment or discrimination based on sex.

Increased Penalties for Payday Timing Violations

AB 2613 seeks to impose the penalties owed by an employer for the late payment of wages.

The bill would amend Labor Code Section 204, which addresses the timing of regular payroll dates. The late payment of wages would result in a $100 per day, per employee penalty for each late day, up to 7 days. Willful or repeated violations would result in a $200 per day penalty.

Extended Time To File Wage Claims

AB 2946 proposes to extend the time to file a charge of discrimination with the state labor agency (the Division or Labor Standards Enforcement, or DLSE) to three years, from the current limit of six months. 

Extended Time to File Discrimination Claims

AB 1870 proposes to extend the time to file a charge of discrimination or harassment with the California Department of Fair Employment and Housing (DFEH) to three years, from the current limit of one year.

Lactation Accommodation

SB 937 proposes to amend existing California law pertaining to an employer’s obligation to accommodate an employee desiring to express breast milk in the workplace.

New commercial buildings with at least 15,000 square feet of space would be required to include “lactation space.” The lactation spaces must be of a certain minimum size, must be located within 500 feet of all employee’s workspaces, and must include an electrical outlet, a sink, and a door sign.

Regardless of the new building requirements, the existing lactation accommodation law would be amended to include all employers would be obligated to provide a clean room with access to electricity, a place to sit, and a shelf. Employers would also be required to provide a sink and a refrigerator nearby. Designating a multipurpose room for lactation purposes would be permissible provided that the its use lactation take priority over other uses. 




Beware the California Labor Agency Investigation

Authors: Michael J. Nader (Sacramento) ,


Beware the Bureau of Field Enforcement (BOFE) investigation in 2018. The California Labor Commissioner’s Office has ramped up investigations by its BOFE unit to enforce wage and hour compliance. The Bureau investigates complaints and takes enforcement actions that can include audits of a company’s payroll records and workers’ compensation insurance coverage, and the issuance of citations for violations of California Labor Code sections. From 2010 to 2016, the ratio of citations to inspections increased from 45 percent to 85 percent, and the assessed wages per inspection increased from around $2,400 to more than $15,000.

The Bureau conducts on-site inspections that usually include a review of a company’s overall compliance with minimum wage and overtime laws, and the laws governing the provision of meal periods and rest breaks. California Labor Code section 90 provides that the Labor Commissioner, including the Bureau, “shall have free access to all places of labor.” In the course of a BOFE investigation, the investigator will typically inspect the worksite for violations, interview employees and other workers, and inspect or excerpt employment records.

Understanding the Agency’s Process

Generally, investigators will seek to inspect a list of employees and their contact information, as well as time and payroll records and copies of the company’s workers’ compensation insurance policy. An investigator’s process will also typically include the following:

·         interviews with employees to determine whether they have sufficient opportunities to take meal and rest breaks, and whether they take them;

·         a review of the employer’s pay stubs to ensure that all California Labor Code section 226(a) requirements are met;

·         a review of the time records showing when employees clock in and out from work, and when they take their meal periods;

·         a review of payroll records to ensure that minimum wages are paid; and

·         a review of the classification of workers as employees or independent contractors.


Based on the results of the investigation, the Labor Commissioner may issue administrative citations for certain violations of the California Labor Code. Specified procedures are provided for companies to appeal citations.

Transportation companies have been targets of BOFE investigations. In a recent report on the Bureau’s enforcement efforts, it listed one assessment for “$220,457 for multiple wage theft violations for illegally misclassifying drivers as independent contractors in San Francisco.”

Preparing for Trouble

So what can your company do to prepare for an investigation?

Self Audit. Consider conducting a self-audit to ensure compliance with California’s wage and hour laws. This audit would likely include a review of your pay stubs, meal and rest break policies, workers’ compensation insurance policies, and time and payroll records. Review your workplace to ensure that all required posters have been posted and are current and to identify workplace safety issues.

Designate a Representative. Consider designating a company representative with knowledge of the company’s wage and hour policies and practices to serve as the company’s primary point of contact for the investigator. The representative should acquire an understanding of the scope of the investigator’s inspection authority and know when to consult with counsel to address any questions about the investigator’s demands. The representative should also know where company policies, records, and information are located, and how to obtain them promptly in response to a request.

Educate Employees. Since a BOFE investigator will also want to interview employees, you may want to ensure that your employees are aware of your policies and in compliance with them. You may want to have managers and supervisors review the company’s meal and rest break policies with employees at regular meetings so that employees know their opportunities to take the breaks. Employees should also be reminded of any policy that strictly prohibits off-the-clock work and requires employees to report all time worked. Also consider implementing a process where, for every payroll period, employees attest that they took their meal and rest breaks and reported all of their time worked.

Be Nice. If an investigator appears unannounced at your workplace, your first interaction will usually set the tone for the rest of the investigation. Be professional, request identification, and consider rescheduling the inspection for a later time when you can have a principal for the company or legal counsel present. Depending on the volume of records involved, consider negotiating with the investigator over whether he or she will accept a sample of records for initial inspection. For employees selected for interviews, explain the process and make sure they understand it is important to be truthful; address any of their concerns; notify them that they are not required to sign anything; and provide a written reminder of the company’s policy that prohibits retaliation because of their participation in the investigation.




What California Employers Need to Know About Protecting Employee Health Information

 Authors: Kelly S. Riggs (Portland) and Chris Olmsted 


Employers obtain employee health information in a number of ways—most commonly, in relation to a work-related injury or when an employee requests medical leave or a disability accommodation. Most employers understand that such information is “confidential,” but may not fully understand what that means or what they should do to protect it.

HIPAA Generally Does Not Apply to Employers

It is a common misconception that the Health Insurance Portability and Accountability Act (HIPAA) applies to employee health information. In fact, HIPAA generally does not apply to employee health information maintained by an employer.  

HIPAA applies only to “covered entities,” which are defined as: (1) health plans; (2) healthcare clearinghouses; and (3) healthcare providers that electronically transmit certain health information (and certain “business associates” of covered entities). If an employer does not fall into one of those categories, HIPAA does not apply to it at all. Indeed, even if an employer is a “covered entity,” HIPAA still does not apply to health information contained “in employment records held by a covered entity in its role as an employer.” So even for those employers, although HIPAA may apply to health information they acquire in their capacities as covered entities, it does not apply to health information they acquire in their roles as employers.

Employers should not forget, however, that HIPAA does apply to an employer’s request for health information from a covered entity. A covered entity may not disclose protected health information to an employer without the employee’s authorization or as otherwise allowed by law. This is true even where the employee is also a patient or member of the covered entity; information maintained in that capacity may not be shared with human resources or an employee’s managers, except as expressly authorized by the employee or applicable law. 

California’s Version of HIPAA

California’ California’s Confidentiality of Medical Information Act (CMIA) provides stronger privacy protections for medical information than HIPAA. Note that CMIA’s definition of provider of health care is much broader than under HIPAA.  It includes contractors of health care providers and others. For example, a business that offers software such as a mobile app, that is designed to maintain medical information could be considered a provider of health care.

Most importantly, CMIA also requires employers who receive medical information to safeguard that information, and prohibits them from disclosing medical information without employee authorization (though there are exceptions). Outside of legal disutes or government official actions, disclosures must be authorized in writing by the employee.  

Internally to the company, the information may be used only for the purpose of administering and maintaining employee benefit plans, including health care plans and plans providing short-term and long-term disability income, workers’ compensation and for determining eligibility for paid and unpaid leave from work for medical reasons.

Accordingly, in order to ensure compliance with these privacy requirements, employers in California should maintain all employee health information in separate, confidential medical files with restricted access, and should implement clear policies, safeguards, and training to help employees understand and comply with the requirements.

Protecting Employee Health Information

Even when HIPAA does not apply, employers still have other legal obligations to protect the confidentiality of employee health information in their possession.

For example, the Americans with Disabilities Act (ADA) requires employers that obtain disability-related medical information about an employee to maintain it in a confidential medical file that is kept separate from the employee’s personnel file. Such information may be disclosed only in limited situations and to individuals specifically outlined in the regulations:

(1) supervisors and managers who need to know about necessary work restrictions or accommodations;

(2) first aid and safety personnel, if a disability might require emergency treatment;

(3) and government officials investigating compliance with the ADA. 

Similarly, the Genetic Information Nondiscrimination Act (GINA) requires employers that acquire an employee’s genetic information (although they generally should not request it) to treat it as a confidential medical record in a separate medical file. It can be maintained in the same confidential medical file as disability-related information. However, different rules regarding when and to whom genetic information may be disclosed apply—which do not include supervisors, managers, or first aid or safety personnel, but do include others not on the list for disclosure of disability-related information.

Handling Requests for Employee Health Information

Notwithstanding the above, employers may disclose employee health information with an employee’s express authorization (which should be in writing). Employers also may, if certain legal requirements are met, disclose such information in response to subpoenas, court orders, or other legally authorized requests, but should examine such requests closely and limit disclosure of health information only to the extent specifically requested and authorized by the employee or applicable law.


Christopher W. Olmsted | Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
4370 La Jolla Village Drive, Suite 990 | San Diego, CA 92122

Telephone: 858-652-3111 |

These articles are intended as a brief overview of the law and are not intended to substitute as legal advice. Any questions or concerns regarding any statute or case law should be addressed to a licensed attorney.