Happy holidays and happy new year!
2016 has been a tumultuous year for all of us. But California continues to serve as a shining beacon, leading the way, including with legislation that protects workers. Here are five new laws worth celebrating as we welcome the new year.
1. Minimum Wage Increase to $15/Hour by 2023 — SB-3
Over the past few years, the California State Legislature has steadily increased the minimum wage, a move that helps stem the rising income inequality in our society. SB-3 increases the minimum wage for all employees to $15 an hour by 2023, and ties future increases to inflation. The minimum wage schedule (subject to certain conditions) will be:
For any employer who employs 26 or more employees:
- 2017 — $10.50 per hour.
- 2018 — $11 per hour.
- 2019 — $12 per hour.
- 2020 — $13 per hour.
- 2021 — $14 per hour.
- 2022 until adjusted — $15 per hour.
For any employer who employs 25 or fewer employees:
2. Increase In Paid Family Leave Compensation — AB-908
Many workers who become new parents or have relatives in need of care do not take the full amount of family leave available to them because they cannot afford to lose so much of their income. AB-908 will increase the amount of wage replacement during paid family leave for most workers. Paid family leave is currently set at 55% wage replacement (to a maximum benefit). After January 1, 2018, but before January 1, 2022, California will provide a minimum weekly benefit of $50 to all workers, will increase wage replacement for those in the bottom third of wage earners to 70%, and will increase benefits to those in the top two-thirds of earners to the greater of 23.3 percent of the state average weekly wage or 60 percent of their wage (to a maximum benefit). After that, in 2021, the Employment Development Department will prepare a report about paid family leave utilization for the Legislature. Also, starting January 1, 2018, there will no longer be a seven-day waiting period for paid family leave benefits. Increased wage replacement will make the difference for many California workers as they take time off to welcome new babies and care for their family members.
3. Expansion of Equal Pay Act to Race and Ethnicity — SB-1063
Following the passage of last year’s Fair Pay Act, California’s Equal Pay Act requires that men and women receive equal pay for “substantially similar work,” not just equal work in the same establishment. The Wage Equality Act of 2016, SB-1063, expands the Equal Pay Act further, to also prohibit employers from paying employees less than what is paid to employees of another race or ethnicity for substantially similar work. The same standards, protections, and remedies apply with respect to equal pay between the sexes and equal pay among people of various races and ethnicities.
4. Eliminating Salary History As a Basis for Unequal Pay — AB-1676
Despite the advancement of women in the workplace, the gender wage gap has been holding steady. In the past decade, it has narrowed by a mere 1.5%. One of the reasons that it persists is that the effects of prior discrimination can inadvertently follow women into new jobs.
Many employers consider an applicant’s prior salary in setting compensation. A woman who was earning $82,000 per year at her prior job will be in a far weaker bargaining position to negotiate salary than a comparable male who had been earning $100,000. Even if both know that the market value of their work is $105,000, asking for a 5% raise is perceived far differently from asking for a 28% raise.
AB-1676 seeks to fix this problem by amending the Equal Pay Act to specify: “Prior salary shall not, by itself, justify any disparity in compensation.” Hopefully, this will motivate employers to ensure that they are compensating employees based on objective measures, including the value that they bring to the company.
5. Protections for California Workers from Out-Of-State Laws and Forums — SB-1241
As I have written before, Labor Code section 925 will ensure that California employees benefit from the protections of California law. This new section of the Labor Code prohibits employers from forcing employees to litigate their legal claims outside of California. It also prohibits employers from stripping employees of their rights under California law by requiring that their claims be decided under the laws of any other jurisdiction. Any agreement that contains “choice of law” or “choice of forum” provisions in violation of Labor Code section 925 are voidable by the employee. This statute will help put the nail in the coffin of non-compete agreements and other provisions that, while lawful elsewhere, violate California public policy.
In California, our elected officials remain committed to ensuring that our laws reflect our State’s values. We have good reasons to celebrate the new laws taking effect in 2017!
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