Fenwick Employment Brief - Spring 2017 Update


New Publications Clarify SF Paid Parental Leave Ordinance

The City of San Francisco has issued helpful guidance regarding its Paid Parental Leave Ordinance. Employers should revisit their existing, or begin drafting their new, paid parental leave policies to comply with upcoming changes.

Although the Ordinance went into effect on January 1, 2017 for employers with 50 or more employees, on July 1, 2017, it will apply to employers with 35 or more employees. On January 1, 2018, it will apply to employers with 20 or more employees. Further, the waiting period for PFL benefits for leaves commencing after January 1, 2018 will be eliminated.

In a recent webinar containing helpful information for employers, the City clarified that the threshold number of employees (i.e., 50 or more employees as of January 1) includes all employees worldwide (not just living or working in San Francisco or California) and that seasonal, temporary, and part-time employees are counted to determine the threshold number.

The City also issued new FAQs, which address the revisions made to the Ordinance and other issues. In addition, the City published a step-by-step guide for employees that walks them through the process of applying for Paid Family Leave benefits through the California Employment Development Department and benefits under the Ordinance. This is a great resource for employers to provide to employees.


City of San Jose Introduces Requirements for Hiring Temporary Workers

Starting March 13, 2017, San Jose’s The Opportunity to Work Ordinance will require San Jose employers to offer existing, qualified part-time employees additional work hours before hiring any temporary, part-time or new workers. Below are highlights from the ordinance.

A covered employer is any private San Jose employer with 36 or more non-exempt employees, which is subject to San Jose’s business tax or maintains a place of business in San Jose that is exempt under California law from the City’s business tax. A qualified employee is an employee who, (1) in a calendar week, performs at least two hours of work for the covered employer within the geographic boundaries of San Jose, and (2) is a non-exempt employee. The Ordinance also applies to temporary or seasonal employees if these two factors are met.

Once an employee qualifies under the Ordinance, the covered employer must exercise good faith and reasonable judgment as to whether the qualified non-exempt employee has the skills and experience to perform the work. Employers must use a transparent and nondiscriminatory process to distribute the hours or work among those existing employees. Retaliation against employees for exercising their rights under the Ordinance is strictly prohibited.

Employers should post an official noti​ce of employee rights and should retain for a minimum of four years: (1) work schedules, (2) payroll records, (3) copies of written offers to current and former part-time employees for additional work hours, and (4) any other records that the San Jose Office of Equality Assurance may require that employers maintain to demonstrate compliance. Violations of the Ordinance can trigger fines of $50 per employee for each day of violation. Also, an employee can bring a private action to recover lost wages, penalties and attorneys’ fees. Additional information is available in the Office of Equality Assurance’s FAQs.


Los Angeles Issues New Regulations on its Ban-The-Box Ordinance

The City of Los Angeles’ Fair Chance Initiative for Hiring became effective on January 22, 2017, with enforcement to start July 1, 2017. Violations between January 22, 2017 and June 30, 2017 may result in a written warning.

The Ordinance and the new implementing rules and regulations impose various prohibitions on private Los Angeles employers, including prohibiting employers from (1) asking about an applicant’s criminal history in employment applications, (2) considering arrests (or pending records), and (3) requiring employers to conduct a criminal background check only after extending a conditional offer that is only conditioned on the results of the check. Also, an employer cannot take adverse action against an individual because of his or her criminal history without first conducting a written individualized assessment that effectively links the specific aspects of the individual’s criminal history with risks inherent in the duties of the position sought. To this end, the City has provided a form for employers’ use.

Employers should be aware of the growing number of local jurisdictions enacting background check ordinances, including San Francisco.


NYC Employers Cannot Ask Applicants About Pay History

Under a new New York City law, both private and public employers cannot ask applicants for prior salary information. One of the key objectives of the law is to combat pay inequality, especially between men and women. Employers in New York City should inform their hiring managers, recruiters, and others who may interview job candidates about this development to avoid legal liability.


Case Law

Seventh Circuit Expands Title VII To Include Sexual Orientation Discrimination

In Hively v. Ivy Tech Community College, the U.S. Court of Appeals for the Seventh Circuit (Illinois, Indiana, and Wisconsin) held that Title VII of the Civil Rights Act of 1964, a federal antidiscrimination law, prohibits discrimination on the basis of sexual orientation. Although several state laws—including the California Fair Employment and Housing Act—forbid this type of discrimination, Title VII has historically been construed to exclude sexual orientation as a protected category. This ruling represents a significant shift in federal law interpretation, one that may require resolution by the U.S. Supreme Court.

Including Additional Information in Wage Statements Does Not Violate California Labor Code

The U.S. Court of Appeals for the Ninth Circuit held in an unpublished decision, Apodaca v. Costco Wholesale Corp. (January 10, 2017), that the inclusion of a line for “vacation pay/nonexempt salaried vacation or float overtime” did not constitute a violation of California Labor Code § 226. According to the Court, the inclusion of information on vacation pay deals with paid time off that an employer is not specifically required to provide under Section 226, and, accordingly, the inclusion of this additional information or the purported failure to provide corresponding hourly rates did not violate Section 226.

Separately, the plaintiff argued that the wage statements failed to identify the total hours worked and the corresponding hourly rates. But the Court found that there was no violation of Section 226 because the employees could engage in basic math to calculate total hours and determine the applicable hourly rate for the hours worked.

While the Apodaca decision provides some relief to employers, employers should note that litigation around wage statements remains hyper-technical and plaintiffs will continue to argue that an employer must comply to the letter with each and every requirement under Section 226.  Employers should partner closely with their payroll provider to ensure that they comply with Section 226’s itemized requirements and with any other wage statement requirements under local laws (for example, for San Francisco employers, the requirement that they track San Francisco paid sick leave accrual).


Federal Agency Action

EEOC Proposes Anti-Harassment Guidance

Earlier this year, the EEOC issued a proposed Enforcement Guidance on Unlawful Harassment for which the Agency invited notice and comment. Among other things, the Guidance defines what constitutes unlawful harassment and sexual harassment, sets out the fundamental framework for employer liability, and offers guidance on preventive practices (including an anti-harassment policy, a complaint system and investigations process, and anti-harassment training).

It is unclear whether the current administration will seek to support, modify or altogether remove this Guidance. Regardless, for California employers, much of the content of the Guidance is already required by California law.​​​​