Every year California businesses need to be mindful of new laws passed in Sacramento that will have significant impacts. Last week the legislative session ended, and below are some of the important laws for your business. Please note this is not an exclusive list and you should contact us to make sure that your business is planning for all of the new laws going into effect in January 2019.
Sex Harassment Settlement Agreement Confidentiality Restrictions. For settlement agreements entered into on or after January 1, 2019, California now prohibits and makes void any provision that prevents the disclosure of information related to civil or administrative complaints of sexual assault, sexual harassment, and workplace harassment or discrimination based on sex. The new law expressly authorizes provisions that (1) preclude the disclosure of the amount paid in settlement and (2) protect the claimant’s identity and any fact that could reveal the identity, so long as the claimant has requested anonymity and the opposing party is not a government agency or public official.
Expanding Scope of Required Sexual Harassment Training. Adding to the requirements that already existed for larger employers, now an employer of five or more employees—including seasonal and temporary employees—must provide certain sexual harassment training by January 1, 2020. Within six months of assuming their position (and once every two years thereafter), all supervisors must receive at least two hours of training and all nonsupervisory employees must receive at least one hour.
Women on Boards. California-based publicly held corporations must have on their board of directors at least one female—defined as people who self-identify as women, regardless of their designated sex at birth. The deadline for compliance is December 31, 2019. A corporation may need to increase its authorized number of directors to comply with this requirement. The bill imposes minimum seat requirements that must be filled by women, proportional to the total number of seats, by December 31, 2021. The Secretary of State must publish a report by July 1, 2019 of the number of corporations whose principal executive offices are in California and have at least one female director, and an annual report beginning March 1, 2020, detailing the number of corporations that (1) complied with requirements in 2019, (2) moved their headquarters in or out of California, and (3) were subject to these provisions during 2019, but no are longer publicly traded.
For each director’s seat not held by a female during at least a portion of the calendar year—when by law it should have been—the corporation will be subject to a $100,000 fine for the first violation and a $300,000 fine for further violations. Corporations that fail to timely file board member information with the Secretary of State will also be subject to a $100,000 fine.
Criminal History. California employers may only consider a “particular conviction” (“for specific criminal conduct or a category of criminal offenses prescribed by any federal law, federal regulation, or state law that contains requirements, exclusions, or both, expressly based on that specific criminal conduct or category of criminal offenses”) relevant to the job when screening applicants using a criminal background check.
In a bit of good news, Governor Brown vetoed a law that would have prohibited businesses from requiring, as a condition of employment, employment benefit, or contract (1) that a job applicant or employee waive any right, forum, or procedure (e.g., arbitration) for a violation of FEHA or the Labor Code, and (2) that a job applicant, employee, or independent contractor not disclose instances of sexual harassment suffered, witnessed, or discovered in the work place or in performance of the contract, opposing unlawful practices, or participating in harassment and discrimination related investigations or proceedings. This means that you may still mandate arbitration agreements as a condition of employment, and we strongly encourage you to do so.
Should you have any questions about this or other legal issues, please do not hesitate to contact me or the BFAS attorney with whom you regularly work.
Trevor D. Large, Attorney
DISCLAIMER: This Advisor is one of a series of business, real estate, employment, estate planning and tax bulletins prepared by the attorneys at Buynak, Fauver, Archbald & Spray, LLP. This Advisor is not exhaustive, nor is it legal advice. You should discuss your particular situation with us or with your own attorney. Our legal representation is only undertaken through a written engagement letter and not by the distribution or use of this Advisor.