New Laws Impacting Businesses In 2017


By: Richard G. Rasmussen and Pablo De Leon

The California Governor and Legislature have been busy passing hundreds of pieces of legislation this past year that have become effective, or will become effective, during the 2017 calendar year. This article attempts to provide a brief overview of some of the key new laws that could potentially impact business operations in California. Unless otherwise noted, the new laws are effective as of January 1, 2017.

Gender Neutrality of Single-User Restrooms Required – AB 1732 requires that all single-user toilet facilities in any business establishment or place of public accommodation be identified as “all-gender” toilet facilities. This law, which goes into effect on March 1, 2017, does not require employers to add single occupancy restrooms, but merely changes the signage requirement for any existing single-occupancy facilities.

Work Authorization Verification Confined – Existing law requires the verification by employers of applicants ability to work in the United States. SB 1001 prohibits an employer from (1) requesting more or different documents than are required under federal law, (2) refusing to honor documents tendered that on their face reasonably appear to be genuine, (3) refusing to honor documents or work authorization based upon the specific status or term of status that accompanies the authorization to work and (4) attempting to reinvestigate or re-verify an incumbent employee’s authorization to work.

Inquiring about Applicants’ Juvenile Criminal History Prohibited – Existing law generally prohibits employers from asking applicants, through any written form or verbal communication, or utilizing as a factor in determining any condition of employment, information concerning an arrest or detention that did not result in a conviction or information concerning a conviction that has been judicially dismissed or ordered sealed. AB 1843 expands this prohibition to cover matters while the applicant was subject to the process and jurisdiction of juvenile court law.

Requiring California Residents to Sign Employment Contracts Mandating Adjudication Outside California Prohibited – Existing law regulates certain terms and conditions of labor contracts, including prohibiting employers from requiring employees or applicants to agree, in writing, to any terms that the employer knows are illegal. SB 1241 prohibits an employer from requiring an employee who primarily resides and works in California, as a condition of employment, to agree to any term requiring the employee adjudicate disputes, including litigation and arbitration, outside of California for a claim arising in California, and allows for the recovery of reasonable attorney’s fees in addition to injunctive relief and any other available remedies.

Minimum Wage Increased – Existing law requires that the minimum wage for all industries is $10 per hour. With the goal of increasing the minimum wage for all industries to $15 per mandatory annual increases, SB 3 requires that the minimum wage increase to $10.50 per hour on January 1, 2017 for any employer with 26 or more employees (a similar increase for employers with 25 or fewer employees will take effect on January 1, 2018). Please note, certain cities and counties have passed minimum wage legislation that in some circumstances require a higher minimum wage. Cities and counties with minimum wage legislation include, but are not limited to, Los Angeles (city and county), Malibu, San Diego and Santa Monica.


Disparate Compensation Justified on Prior Salary Alone Prohibited – Existing law prohibits payment to employees at wage rates less than the rates paid to employees of the opposite sex “for substantially similar work, when viewed as a composite of skill, effort, and responsibility,” except under specific conditions, i.e., a seniority system, a merit system or a bona fide factor other than sex. SB 1676 clarifies that prior salary cannot, by itself, justify any disparity in compensation.

Disparate Compensation Based On Race or Ethnicity Prohibited – Existing law prohibits payment to employees at wage rates less than the rates paid to employees of the opposite sex “for substantially similar work, when viewed as a composite of skill, effort, and responsibility,” except under specific conditions, i.e., a seniority system, a merit system or a bona fide factor other than sex. SB 1676 expands the prohibition to include disparate pay among employees of different races or ethnicities.

Exemption from Requirement that Total Hours Worked be Included on Pay Stub Expanded – Existing law requires employers to provide employees an accurate itemized written statement containing specific information either semi-monthly or at the time of each payment of wages, including total hours worked by the employee, unless the employee’s compensation is solely based on a salary and the employee is exempt from payment of overtime under subdivision (a) of Section 515 or any applicable order of the Industrial Welfare Commission. AB 2535 expands the exemption from this requirement to include employees exempt from the payment of minimum wage and overtime under additional specified statutes or applicable orders of the Industrial Welfare Commission.

Employers Required to Inform Employees of Employer Prohibition from Discriminating or Retaliating Against Employee Victims of Domestic Violence, Sexual Assault or Stalking – Existing law prohibits employers from discriminating or retaliating against any employee who is a victim of domestic violence, sexual assault or stalking for taking time off from work for specified purposes related to their situation. AB 2337 requires employers to inform all new employees in writing of this prohibition and the employee’s related rights and other employees upon request.

Paid Family Leave Benefit Calculation Revised – Existing law provides wage replacement benefits to workers who take time off to care for family members or bond with minor children per a specified formula. AB 908 revises the formula for claims commencing after January 1, 2018 but before January 1, 2022 and eliminates the 7-day waiting period for benefits. This law goes into effect on January 1, 2018.

Smoking Prohibition Expanded – Existing law prohibits smoking inside enclosed spaces at places of employment for certain employers. AB 7 eliminates most of the specified exemptions to generally expand the prohibition to cover all employers, regardless of size, including owner-operated businesses (i.e., having no employees, independent contractors or volunteers, in which the owner-operator is the only worker).

The foregoing article was prepared by Richard Rasmussen and Pablo De Leon. Anglin Flewelling Rasmussen Campbell & Trytten LLP (AFRCT) is a full-service law firm, providing legal counsel in most every area encountered by businesses operating in California.

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