Legal News

First Quarter Update 2017

Human Resource professionals have made it through the first quarter of 2017, and we have seen many new labor laws and updates to existing regulations. There are many new regulations in front of us. We also wait in anticipation for the final ruling of the Department of Labor (FLSA) overtime rule, which was to take effect December 1, 2016 and blocked by a Texas federal Judge.

The ruling would extend mandatory overtime pay to more than 4 million salaried workers and would have doubled salaries to $47,500; the maximum salary a worker can earn and still be eligible for mandatory overtime pay.  The court was careful to state it was not ruling on the legality of the salary-level test itself—but only that the DOL was not authorized to utilize the salary-level test as amended under the final rule. Human Resource Departments should not assume, however, that the overtime rule will be permanently barred. HR should still have a plan to move forward if necessary in the future. For now, we wait to see if it will be implemented later down the road.

It may seem to be too early to look into the horizon, but without planning and supporting or opposing future regulation we will be at the mercy of legislators. Looking ahead, all bills have until April 28, 2017 to pass the policy committees and until June 2, 2017 to pass the original house of origin, so many amendments are possible and particularly for the “spot bills.” SHRM has taken a stance to support the following bill:

Veterans’ Hiring Preference for Private Employers (AB 353 and AB 1477) are similar bills that attempt to address the higher-than-normal unemployment rate for returning veterans. Hence, new Government Code section 12958 would authorize employers to extend a preference during hiring decisions to honorably discharged veterans.

AB 353 unanimously passed the Assembly’s Veterans Affairs Committee and has been referred to the Labor and Employment Committee to be heard on April 19, 2017.  AB 1477 has been referred to the Assembly’s Veterans Affairs and Labor and Employment Committees but no hearings have been scheduled yet.

The House of Representatives passed the Small Business Health Fairness Act (H.R. 1101) on March 22, a bill that would make it easier for small businesses—those that could purchase coverage in the small group market—to band together and offer employee coverage through association health plans (AHPs).

IE SHRM will be present at the CalSHRM Employment Law & Legislative Conference and we will keep you updated on the “2017 California Employment Law & Legislative Forecast.”


Think Outside the Box

As a recruiter, have you ever had the perfect applicant apply for a position and he/she was dispositioned as “not qualified” because of a conviction or prior arrest record? If you and/or the hiring manager were not aware of the applicant's record, would you be in a different mindset?

If you live in a city or county that has adopted “Ban the Box” or the “Fair Chance” ordinance, then your applicant pool has probably grown exponentially. If you do not live in an area that has imposed this ordinance, you may want to prepare your organization for the California statewide ban the box regulation.  On February 16, 2017, five California assembly members introduced Assembly Bill 1008, which proposes to add a section to the Fair Employment and Housing Act (FEHA) containing new state-wide restrictions on an employer’s ability to make pre-hire and other employment decisions based on an applicant or employee’s criminal records, including a ban the box component. Ban the box refers to a grassroots effort to remove the check box on job applications that asks if a candidate has ever been convicted of a crime.

California’s Department of Fair Employment and Housing (DFEH) recently enacted regulations that impose new regulations when conducting criminal background checks in employment decisions.  The new regulations are expected to go into effect on July 1, 2017.  The new regulations apply state-wide and, ultimately, will make it difficult for any employer in California to maintain no-hire policies for people with criminal convictions.

An employer's use of an individual's criminal history in making employment decisions may, in some instances, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. Ban the box, which is based on longstanding court decisions and existing guidance documents that the U.S. Equal Employment Opportunity Commission (Commission or EEOC) issued over twenty years ago. The Guidance focuses on employment discrimination based on race and national origin.

President Obama signed ban the box which directed federal agencies to delay inquiries into job applicants’ records until later in the hiring process. Public employers have incorporated the 2012 U.S. Equal Employment Opportunity Commission guidelines that advise employers to make individualized assessments instead of using blanket exclusions. Employers should consider the time passed since the offense and its relevance to the job. And because background-check results may contain errors, candidates should be given an opportunity to review the results.

The point of ban the box law is not to enforce hiring convicts; it is meant to give applicants a fair chance in the hiring process. The process calls for conducting a job interview first to see if the applicant is qualified. If the candidate moves through the process in the same steps as other candidates and is selected as one of the final candidates, then the employer can conduct the background investigation and then analyze the results to determine whether a conviction is job-related. The hiring decision is then based on qualifications, not the candidates’ criminal record.

In addition to federal and local governments that have implemented ban the box, there are currently 150 cities and 26 states that have executed ban the box. This affects a population of 211 million people or two-thirds of the U.S. population. Cities that have already implemented ban the box in California include Alameda County, Berkeley, Carson, Compton, East Palo Alto, Los Angeles, Oakland, Pasadena, Richmond, Sacramento, San Francisco, and Santa Clara County.

When government implements new policies, it is a natural progression for states and local governments to follow. If you conduct business in any of the above mentioned cities it is recommended that your company adhere to the policies, immediately. Companies in other areas should prepare for July 1, 2017.  Failure to follow local and state regulations can result in complicated and costly law suits.

California Ban-the-Box Bill

California Assembly Bill 218 (2013) (applies to public employment) Signed on October 10, 2013 by Governor Edmond “Jerry” Brown (D), AB 218 removes questions about convictions from state agency, city, county, and special district job applications and postpones such inquiries until later in the hiring process. The bill was initially introduced in 2012 as AB 1831, which applied to only cities and counties. After the first effort stalled in the senate, AB 218 was introduced in 2013. Sponsoring organizations included the National Employment Law Project, Legal Services for Prisoners with Children, All of Us or None, and PICO California. More than 100 organizations—spanning labor, interfaith, reentry, civil rights, employment, criminal justice, and others groups— formed a coalition that strongly supported the bill. The statute became effective on July 1, 2014.