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OCTOBER 2005
I. LEGISLATIVE/REGULATORY
UPDATE
Pending Legislation
California Legislation
Governor Schwarzenegger vetoed the following
employment related bills; each had been passed by both houses of the California
legislature:
AB 48 (Lieber) would
have raised the state minimum wage to $7.25 on July 1, 2006 and $7.65
on July 1, 2007. The bill would have also provided for an automatic
adjustment of the minimum wage on January 1 of each following year,
calculated by multiplying the minimum wage by the previous year’s
rate of inflation.
AB 169 (Oropeza) would
have mandated damage awards and new civil penalties for gender pay equity
violations. Specifically, an employer who failed to pay employees of
each gender equally for equal work would have been liable for: (1) the
difference in the amount of wages; (2) interest thereon; (3) an additional
equal amount in liquidated damages; (4) a civil penalty equal to twice
the balance of the wages; (5) the costs of the lawsuit; and (6) reasonable
attorney’s fees. If it was determined that the employer willfully
violated the law, the aggrieved employee would have been entitled to
recover: (1) the balance of the wages; (2) interest thereon; (3) an
equal amount of liquidated damages; (4) a civil penalty equal to four
times the balance of the wages; (5) the costs of the lawsuit; and (6)
reasonable attorney’s fees. The Division of Labor Standards Enforcement
would have received 75% of the penalty and the aggrieved employee would
have received 25% of the penalty.
AB 391 (Koretz) would
have required employers to provide unemployment insurance benefits to
employees unemployed due to a strike.
AB 875 (Koretz) would
have required the Labor and Workforce Development Agency, in consultation
with the Franchise Tax Board and the Joint Enforcement Strike Force
on the Underground Economy, to develop and implement by July 1, 2006
a set of standards that, if met by a particular employer, would trigger
a recommendation for an audit or investigation by state tax authorities.
The set of standards would have been required to take into account,
among other factors, the severity and number of violations by the employer.
After July 1, 2006, the Labor Commissioner would have been required
to take the following actions with respect to an employer who has met
the set of above-referenced standards: (1) notify the tax authorities
each time the set of standards is met by the employer; (2) provide the
appropriate state tax authorities with the name of the employer and
all relevant and necessary information regarding the violations; and
(3) make a recommendation to the appropriate tax authorities that the
employer be audited or investigated.
AB 1310 (Nunez) would
have created a detailed notice process that an employer must follow
prior to utilizing a severance agreement. AB 1310 would have mandated
that an employer with more than 500 employees comply with the following
requirements if it desires the voluntary resignation of a group of 25
or more employees in exchange for a severance package: (1) an accurate
written estimate of the tax consequences to the employee of acceptance
of the offer; (2) accurate written projections of the present value
of all compensation, including, but not limited to, wages, health care
benefits, and retirement benefits, that may be lost or impaired as a
result of accepting the offer, assuming the employee were to continue
in his or her employment with the employer for an additional 5, 10,
and 15 years; and (3) a period of 21 days for the employee to consider
the offer. An employer that fails to comply with the requirements would
have been liable to each aggrieved employee in the amount of $100 per
day for the period from the making of the offer until the date that
the employer provides the required disclosures and reconsideration opportunity.
SB 174 (Dunn) would
have entitled any employee receiving less than the legal minimum wage
or the legal overtime compensation to recover: (1) the unpaid balance
of the full amount of the minimum wage or overtime compensation; (2)
interest thereon; (3) reasonable attorney’s fees; and (4) costs
of the lawsuit. If the employee was paid less than twice the minimum
wage, the civil action to recover unpaid minimum wages or overtime compensation
could have been brought by the employee on behalf of the employee and
other current and former employees who were also paid less than twice
the state minimum wage.
Expect to see these bills resurface next
year – the second year of the current two-year legislative session.
Governor Schwarzenegger did sign AB
1400 (Laird) into law. AB 1400 is entitled “The Civil Rights
Act of 2005” and amends sections 51, 51.5, 51.8, and 53 of the California
Civil Code (also known as the Unruh Civil Rights Act). AB 1400 provides
that all individuals, regardless of marital status or sexual orientation,
are entitled to “full and equal accommodations, advantages, facilities,
privileges, or services in all business establishments of every kind whatsoever.”
The Unruh Civil Rights Act previously prohibited business establishments
from discriminating on the basis of sex, race, color, religion, ancestry,
national origin, disability, or medical condition.
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Burdens of Proof in California Disability Discrimination Cases
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