News & Events

Changes to California’s Mandatory Sexual Harassment Prevention Training Law

by Sara Boyns

September 5, 2019

Changes to California’s Mandatory Sexual Harassment Prevention Training Law
By Sara Boyns

On August 30, 2019 Governor Newsom signed Senate Bill 778, which extends the date for employers with five or more employees to provide mandatory sexual harassment prevention training to most of their employees.  Prior law stated that the training had to be completed by January 1, 2020, but SB 778, which takes effect immediately, extends the time limit for providing the mandatory training and education to January 1, 2021.  However, this new law still requires new nonsupervisory employees to be provided the mandatory training within six months of hire, and new supervisory employees to be provided the training within six months of becoming a supervisor.  The new law requires the training to be provided once every two years.

Other important provisions of this new law include:

• Employers who provided mandatory sexual harassment prevention training and education in 2019 do not have to provide it again until 2021, and every two years thereafter.
• The training may be completed by employees individually or as part of a group presentation, and may be completed in shorter segments, as long as the applicable hourly total requirement is met.
• Employers are defined as any person or company regularly employing five or more persons or regularly receiving the services of five or more contract workers, or any person acting as an agent of an employer, directly or indirectly, the state, or any political or civil subdivision of the state, and cities.
• Employers must also include prevention of abusive conduct as a component of the training and education.  “Abusive conduct” means conduct of an employer or employee in the workplace, with malice, that a reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.
• Employers must also provide training inclusive of harassment based on gender identity, gender expression, and sexual orientation as a component of the sexual harassment prevention training and education. The training must include practical examples inclusive of harassment based on gender identity, gender expression, and sexual orientation, and must be presented by trainers or educators with knowledge and expertise in those areas.
• Beginning January 1, 2020, for seasonal, temporary, or other employees that are hired to work for less than six months, an employer shall provide the mandatory training within 30 calendar days after the hire date or within 100 hours worked, whichever occurs first.
• If a temporary employee is employed by a temporary services employer to perform services for clients, the training shall be provided by the temporary services employer, not the client.
• Different rules apply to agricultural workers.
• Employers may develop their own training, may send their employees to a live or web based training provided by a trainer who meets the required qualifications, or may direct employees to view the online training course that the Department of Fair Employment and Housing (DFEH) will develop and make available on its internet website. The DFEH states the training will be available “by late 2019.”

You can see the full text of the new law at https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200SB778.  While employers have more time to comply with the mandatory sexual harassment prevention education and training requirements, it is important to accurately calendar training deadlines for all new hires, new supervisors, and other employees to ensure compliance with the law.

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CalSavers: Retirement Planning Made Easy

by Fenton Keller

September 5, 2019

CalSavers: Retirement Planning Made Easy
By Susannah L. Ashton

What is CalSavers? As of July 1, 2019, employers may begin registering with the CalSavers Retirement Savings Program (“CalSavers” or the “Program”), an IRA designed to benefit employees whose employers do not to offer traditional retirement plan programs.  With minimal action required and no fees or liability for employers, CalSavers is a simple and effective way for employees to save money and plan for the future.

CalSavers is designed to make it easier for employees to save by lowering the barriers that often keep people from doing so: enrollment is automatic and contributions are made through payroll deductions.  Once enrolled, the money saved belongs solely to the employees and accounts can move freely with employees from one job to the next.  CalSavers is not sponsored by the employer, meaning the employer is not responsible nor liable.  Employers’ only responsibilities under CalSavers are limited to registering for the Program, providing employee information to the Program Administrator, and remitting employee contributions through payroll deductions.

Who has to participate in CalSavers? CalSavers is mandated for all private employers in California, both for-profit and non-profit entities, that do not already sponsor a retirement plan for their business and who have more than five full- or part-time employees over the age of 18 (with at least one employee working in the state) (“Eligible Employers”).  However, employers who maintain or contribute to a Tax-Qualified Retirement Plan which qualifies for favorable federal income tax treatment, regardless of whether all employees are eligible for the Plan, or employers who have fewer than five employees are prohibited from participating in the Program.  Note that an employer-provided payroll deduction IRA program that does not provide for automatic enrollment is not a Tax-Qualified Retirement Plan.

If you are an employer who is required to participate in CalSavers, what do you need to do? Prior to their mandatory participation date, employers must log on to the CalSavers site to either register online or certify their exemption from CalSavers by stating that their business already maintains a retirement plan.  The effective dates are based on the employer’s number of employees:

An employer’s number of employees is the average number of employees as reported to the California Employment Development Department for the quarter ending December 31 and the previous three quarters of available data.

How do employees enroll in CalSavers? Existing employees of Participating Employers must be enrolled within 30 days after the employer registers with the Program and employees who are hired after the employer registers will be automatically enrolled within 30 days of their date of hire or date of eligibility.  Although eligible employees will be automatically enrolled, participation in the CalSavers program is voluntary, and employees may choose to opt out at any time.

What happens to employers who do not comply with CalSavers? Employers who, without good cause, fail to allow their eligible employees to participate in CalSavers, on or before 90 days after service of notice of its failure to comply, shall pay a penalty of $250 per eligible employee if noncompliance extends 90 days or more after the notice, and if found to be in noncompliance 180 days or more after the notice, an additional penalty of $500 per eligible employee.

What else do employers need to do? On each payroll date, the employer must deduct and transfer each participating employee’s contribution to the CalSavers Administrator at the applicable contribution rate for each participating employee.  All compensation must be remitted as soon as administratively possible, not to exceed seven business days from the date of deduction.  Employers may add their own payroll service provider as a delegate to help perform the employer facilitation duties on employers’ behalf.

When providing information to employees, employers are required to remain neutral about their employees’ participation in CalSavers.  The regulations expressly preclude employers from requiring, endorsing, encouraging, prohibiting, restricting, or discouraging employee participation in the Program, or from providing any advice or direction regarding any employee decision about the Program (e.g., investment choices, contribution rate, etc.).

In order to maintain neutrality, the Program will provide an email template at the time of registration that employers may share with employees to inform them that CalSavers will reach out to them.  The employee can then communicate with CalSavers directly to get further information and to answer any questions they may have.  Further, Exempt Employers who wish to inform employees who are ineligible for an employer-sponsored retirement plan about any rights or benefits with CalSavers are encouraged to contact CalSavers directly for guidance.

Employers’ only other ongoing responsibility is to ensure the Employee Information Packet is delivered during each open enrollment period to all eligible employees who are not participating employees (including those who have previously opted out).

For more information, employers are encouraged to visit the CalSavers website at https://www.calsavers.com/.

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Workplace Law – Background Check Requirements

by Fenton & Keller

August 23, 2019

Question: I own a company where my employees have to enter the homes of my clients. Can I have criminal background checks done on my current employees?

Answer: Yes, the law allows consumer reports and investigative consumer reports (commonly referred to as background checks) on existing employees for the purpose of evaluating the employee for promotion, reassignment or retention as an employee. Specific disclosures must be provided to your employees, along with written authorization as required by the federal Fair Credit Reporting Act (FCRA), the California Investigative Consumer Reporting Agencies Act (ICRAA), and the California Consumer Credit Reporting Agencies Act.

Consumer reports and/or investigative consumer reports contain information such as criminal histories, DMV reports, verification of education, license, and past employment history. By contrast, a consumer credit report contains information about an individual’s creditworthiness, credit standing, and credit capacity, which is used in determining the individual’s eligibility for employment. An employer is not required to comply with the California Consumer Credit Reporting Agencies Act requirements unless the employer seeks to obtain a consumer credit report.  A consumer credit report can only be obtained by employers in certain circumstances; so contact legal counsel if you wish to obtain an employee’s consumer credit report.

Both the FCRA and the ICRAA require employers to do the following before obtaining a consumer report and an investigative consumer report:

• Provide separate FCRA and ICRAA written notices to the employee of the intent to obtain a background check report.
• The FCRA notice must: (1) State that the report may be obtained for employment purposes; (2) Be clear, conspicuous, and in writing; and (3) Be in a document that consists solely of the disclosure.
• The ICRAA notice must: (1) Be clear, conspicuous, and in writing; (2) Be in a document that consists solely of the disclosure; (3) State that an investigative consumer report may be obtained; (4) State the permissible purpose of the report; (5) State that the disclosure may include information about the employee’s character, general reputation, personal characteristics, and mode of living; (6) Identify the investigative consumer reporting agency that will conduct the investigation by name, address, and telephone number; (7) State the nature and scope of the information requested; (8) Provide a summary of the employee’s rights under the ICRAA; and (9) Contain a box that the employee may check to receive a copy of the credit report.
• Obtain the employee’s written authorization before the background check is obtained;
• The employer must certify to the reporting agency performing the background check that the employer has complied with the requirements of the FCRA and the ICRAA by making the applicable disclosures to the employee; and
• The employer (or reporting agency) must provide a copy of the report to the employee if the employee requests it. Agencies who conduct background checks often provide the necessary notices for obtaining background checks, and may help you obtain employee authorizations. It is important to use an agency that follows the FCRA and ICRAA requirements. When you receive the background check reports, if you believe you will be discharging an employee based on the report’s findings, you should contact an attorney to discuss the report’s findings since the law restricts employment decisions based on an employee’s criminal history. There are also certain procedures that must be adhered to before discharging an employee based on criminal history.

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WORKPLACE LAW – Travel Time Pay

by Fenton & Keller

June 18, 2019

Question: Due to the U.S. Open traffic this weekend I expect it will take my employees longer to make deliveries and perform other tasks outside the office during the work day.  Do I have to pay them for sitting in traffic?

Answer: Yes, time spent by your non-exempt employees performing work tasks that require travel is compensable, even when it takes your non-exempt employees longer to perform their tasks because of traffic.  Additionally, if they end up working more than 8 hours in a day because of that travel time, they will be entitled to overtime pay.

The Industrial Welfare Commission Orders define “hours worked” as the “time during which the employee is subject to the control of an employer.” For example, time spent commuting to and from work is not considered “hours worked,” and a commute made longer due to traffic is not compensable.  However, when employees are on the road making deliveries and performing other employer directed tasks, they are under the employer’s control, and if traffic causes these employees to take longer to perform these tasks, all of that time is compensable.  California law does not distinguish between hours worked during and outside the employer’s "normal" business hours.

It should also be noted that under state law, if an employer requires an employee to attend an out-of-town business meeting, training session, or any other event, whether the outing involves same day or overnight travel, the employer is obligated to pay for the employee's time in getting to and from the location of that event. Time spent driving, or as a passenger on an airplane, train, bus, taxi cab or car, or other mode of transportation, in traveling to and from this out-of-town event, and time spent waiting to purchase a ticket, check baggage, or get on board, is time spent carrying out the employer's directives and is compensable.  However, time spent taking a break from travel in order to eat a meal, sleep or engage in purely personal pursuits not connected with traveling or making necessary travel connections (such as, for example, spending an extra day in a city before the start or following the conclusion of a conference to sightsee), is not compensable.

The rate at which the travel must be paid depends upon the nature of the compensation agreement. If the employer has agreed to pay a fixed hourly rate of pay for any work performed, then travel time must be paid at that regular hourly rate, and if overtime is incurred, the required overtime rate based on the regular hourly rate must be paid.  However, an employer may establish a separate rate of pay for hourly employees for travel time as long as advance notification has been provided to the employees, and provided the rate does not fall below the statutory minimum wage.

In addition to travel time, employers are required to reimburse employees for necessary expenses incurred in connection with employer-required travel. The most common form of employee expense reimbursement related to travel is mileage reimbursement when the employee uses the employee’s own vehicle for work related travel. The safest approach is to use the IRS mileage reimbursement rate.  The 2019 rates can be found at https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2019

As we welcome golf fans to the Peninsula employers need to be aware of potential employment related issues caused by the traffic and plan accordingly.

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