On October 12th, Governor Jerry Brown signed two bills – Assembly Bill 168 and Senate Bill 63 – into law. Both are sure to have restrictive and costly consequences for business owners in California, with SB 63 specifically targeting small business with less than 50 employees.

What employers need to know about these new laws:

AB 168: This new law applies to both men and women, but is mainly directed at reducing the discrimination that can follow women from job to job. Gender pay equity has been a hot topic lately, both nationally and in the state of California. According to federal data from 2015, the median wages for women in California are 84.8 percent of those for men. In recent years, Brown has signed two other bills into law (AB 1676 and SB 358) aimed at reducing the gender pay gap in California. Brown enacted the salary privacy bill, while at a celebratory signing ceremony at Women’s Empowerment, a Sacramento nonprofit for homeless women, surrounded by members of the California Legislative Women’s Caucus.

Under AB 168, employers may not seek salary history information about an applicant for employment in any way, whether orally or in writing, personally or through an agent or associate. The term “salary history information” includes any type of compensation from hourly wages, to yearly bonuses and benefits.

Additionally, AB 168 prohibits employers from relying on salary history as a factor in determining what salary to offer an applicant, or whether or not to offer employment at all. It does specify that it doesn’t prohibit an applicant from “voluntarily and without prompting” disclosing salary history information to a prospective employer, and in the event an applicant does so, the employer may consider or rely on that information in determining the salary for that applicant.

However, salary information for public employees is largely a matter of public record, so AB 168 does not apply to salary history information disclosable to the public pursuant to federal or state law, such as the California Public Records Act or the federal Freedom of Information Act.

SB 63: Also known as the New Parent Leave Act, this new law extends employee parental leave protections to employers with 20 or more workers. (The previous parental leave law only applied to employers with 50 or more workers.) But SB 63 also impacts workplaces with fewer than 20 employees, because multiple locations in a 75-mile radius owned by the same employer would be combined to determine the total employee threshold.

SB 63 requires California small businesses (20 to 49 employees) to offer workers up to 12 weeks of unpaid, job-protected family leave to bond with a new baby or child and will allow more California workers who currently pay into paid family leave programs the ability to take leave themselves.

Before an employee begins their leave, if the employer does not provide that employee with a guarantee of employment in the same or a comparable position upon their return, they will be deemed to have refused to allow the leave. Though the leave is unpaid, the employee is still entitled to utilize accrued vacation pay, paid sick time, and any other accrued paid and unpaid time off that has been previously negotiated with the employer, during the period of parental leave.

Additionally an employer may not refuse or neglect to maintain and pay for continued group health coverage for employees during the duration of their parental leave at the same level and under the same conditions that would have been provided had the employee continued to work. (The employer is, however, entitled to recover the costs of maintaining this health coverage for employees that fail to return to work following the leave – if the reason is something other than a serious health condition or other circumstances beyond the employee’s control.)

In addition to stretching a small business’ resources even thinner, any violation of SB 63 is considered an “unlawful employment practice” opening up California’s small businesses to further costly litigation.

AB 168 and SB 63 will go into effect on January 1, 2018. Until then, California employers may want to review and revise their hiring and leave policies, to be sure they’re compliant with the new changes in the new year.

Emplicity understands that HR Outsourcing should be simple and meaningful. As a Professional Employer Organization (PEO), we strive to be a great partner in supporting your business. If you would like to request more information on how we can assist your needs, please reach out to us at 877-476-2339. We are located in California – Orange County, Los Angeles, and the greater Sacramento and San Francisco area.

NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of their clients.

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