Calif: New Employment-Related Laws Go Into Effect

News Updates

A number of bills enacted in 2013 took effect on July 1, 2014. These include bills that:

  • Increased California’s minimum wage to $9.
  • Expanded California’s paid family leave benefit program.
  • Enacted new limits on public employers concerning criminal background checks.
  • Amended the procedures for work-sharing plans used to avoid lay-offs.

First Part of Two-Step Minimum Wage Increase (AB 10)

Assembly Bill (AB) 10 increased California’s hourly minimum wage from $8 to $9 effective July 1, 2014, and to $10 on Jan. 1, 2016. The first part of this minimum wage increase took effect as scheduled on July 1, and since there are significant penalties for failure to pay the minimum wage, employers should review their pay records and practices to ensure compliance.

While this hourly minimum wage increase most directly impacts non-exempt employees, it also has implications for other employees.

One requirement to meet the California executive, administrative or professional exemptions from overtime is that the employee receives a monthly salary that is no less than two times minimum wage for full-time employment. The current monthly minimum is $2,774. As of July 1, this minimum monthly salary requirement increased from $2,773 to $3,120 (and will increase to $3,467 in January 2016.) Similarly, the minimum annualized salary has now increased from $33,280 to $37,440 (and will increase again to $41,600 in January 2016.)

One requirement for inside commissioned salespersons to be exempt from overtime is that the salesperson’s total earnings result in an effective hourly rate that is one and one-half times the state minimum wage. As of July 1, this minimum rate increased from $12 per hour to the current $13.50 per hour (and will increase to $15, effective Jan. 1, 2016.)

Employers are generally required to provide and maintain the tools needed for employees to perform their jobs. Employees may be asked to furnish their own hand tools if they receive at least twice the minimum wage. As of July 1, this increased from $16 per hour to $18 (and will increase to $20 per hour on Jan, 1, 2016).

Employers must also ensure they are now displaying updated posters or notices concerning this increased minimum wage. An updated version of the Department of Industrial Relations’ “Official Notice” for the 2014 and 2016 minimum wage increases is available at:

Expanded Basis to Receive “Paid Family Leave” Benefits (SB 770)
Since 2004, California has provided up to six weeks of wage replacement benefits to workers who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a minor child within one year of the birth or adoption of the child. While often referred to as “paid family leave,” this program is funded by additional worker contributions to the Unemployment Compensation Disability Fund and essentially provides “wage replacement” benefits during an already-provided leave.

Senate Bill (SB) 770 enables employees to also receive these partial-wage-replacement benefits to care for seriously ill grandparents, grandchildren, siblings or parents-in-law, as defined. Please note, this change does not provide new bases for employees to take leave from their employer, but simply expands the types of leaves for which employees can seek wage replacement benefits if their leave is approved.

New Limits for When Public Employers May Conduct Criminal Background Checks (AB 218)

AB 218 imposes new conditions concerning when - but not whether - a state or local agency may obtain an applicant’s criminal history. This bill amends Labor Code section 432.7 to generally prohibit a state or local agency from inquiring about criminal convictions until after the applicant’s qualifications for the position have been determined to meet the position’s requirements. It also specifies that a state or local agency would be permitted to conduct a criminal history background check after the applicant has been deemed to meet the position’s requirements.

These new conditions do not apply to positions for which a state or local agency is required by law to conduct a criminal history background check; to any position within a criminal justice agency (as defined by Penal Code section 13101); or to any individual working for a criminal justice agency on a contract basis or on loan from another government agency.

As a reminder, these so-called “Ban the Box” initiatives have been enacted or are being considered in many municipalities and other states, and many propose to enact similar limitations on the ability of private employers, not just public employers, to consider criminal history information. For example, and as a reminder, San Francisco has passed the Fair Chance Ordinance, which enacts new restrictions on a private employer’s ability to obtain and use criminal history information. This ordinance applies to employers with more than 20 employees, regardless of the employees’ locations, and takes effect Aug. 13, 2014. More information about the Fair Chance Ordinance is available on the website of the City and County of San Francisco Office of Labor and Standards Enforcement at:

Changes Regarding Work-Sharing Plans Used by Employers to Avoid Layoffs (AB 1392)

California and federal law allows employers to participate in the work-sharing unemployment compensation benefits program which makes employees eligible to receive a reduced amount of unemployment compensation benefits if their work hours are reduced by more than 10 percent. For example, employers have used these programs to effectuate a 20 percent reduction of the workforce by reducing full-time employees to four-day workweeks rather than laying off 20 percent of its employees.

AB 1392 amends California Unemployment Insurance Code section 1279.5 regarding work-sharing plans enacted after July 6, 2014. More information about these changes, as well as the general procedure to obtain the requisite approval from the California Employment Development Department for plans enacted prior to July 5, 2014 and after July 6, 2014, is available at

Michael Kalt, an attorney at Wilson Turner Kosmo in San Diego, serves as the government affairs director for CalSHRM, the California State Council of the Society for Human Resource Management. 

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