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New Laws on Harassment, Wage and Hour Violations

In my work with organizations I have two focus areas – Executive Coaching and HR Consulting. Keeping clients abreast of new and changing legislation in the dynamic world of California labor law falls into the HR Consulting bucket, but is also important for the executives I coach.

Here’s an update on some key legislation affecting employers in 2019.

New Restrictions on Sexual Harassment Settlement Agreements

Two recently enacted laws will make it more difficult for employers to resolve workplace sexual harassment and discrimination disputes.

The Code of Civil Procedure Section 1001 prohibits settlement agreements that bar the disclosure of facts related to claims filed for:

Sexual assault
Sexual harassment
Workplace harassment or discrimination based on sex
Failure to prevent harassment or discrimination based on sex
Retaliation against a person for reporting harassment or discrimination based on sex

The law allows the identity of the claimant, and any facts that could lead to the discovery of that identity, to remain confidential if requested by the claimant. Employers are still allowed to enter into settlement agreements that prohibit the disclosure of the settlement amount.

Another new law, SB 1300, amends California’s Fair Employment and Housing Act (FEHA) by placing additional limits on settlement agreements. Employers are now prohibited from requiring an employee, as a condition of employment or in exchange for a bonus or raise, to sign a non-disparagement agreement that prevents the employee from disclosing information about unlawful acts in the workplace. The law also adopts a lower standard for liability, as such:

A plaintiff does not need to prove that tangible productivity has declined as a result of the harassment.
A single incident of harassing behavior may be enough to create a hostile work environment. Proof of a pattern of harassing behavior in the past is no longer required.
Harassing behavior is not acceptable based on historical norms, or industry or company custom.

As an employer you should review your harassment policies to ensure that they align with the recent changes in law. Also, take complaints seriously! Remember to always investigate claims using qualified, impartial investigators, and take corrective action. Create a culture that makes it very clear to leaders and employees that harassment of any kind will not be tolerated.

California has expanded mandatory anti-harassment training to smaller employers

Employers with at least five employees must conduct mandatory sexual harassment training by the end of this year to comply with SB 1343, passed in 2018. SB 1343 requires that training of both supervisors and non-supervisors be completed by January 1, 2020. Training for supervisors must be at least two hours, and training for non-supervisors must be at least one hour. Training must be repeated at least every two years. Remember to keep records of training received by employees and supervisors.

Managers may be personally liable for wage and hour violations

According to a recent decision by a California appellate court (Atempa v. Pedrazzani), an owner, officer or managing agent of a corporate employer can be held personally liable for civil penalties for unpaid wages or overtime.

The plaintiff in this case worked at a restaurant owned by Pama, Inc. He sued the company for unpaid overtime, meal period and rest break violations. When Pama, Inc. filed for bankruptcy, the plaintiff successfully pursued recovery from the restaurant owner, Paolo Pedrazzani.

What this means for you as an employer is that you need to be sure that you and your managers consistently follow wage and hour rules. Even unintentionally failing to comply with the law can create personal liability.

Other legal decisions of note

Caldera v. Department of Corrections and Rehabilitation. The plaintiff in this case sued for harassment on the basis of disability after being taunted by his coworkers about his stuttering over a period of two years. The employer argued that the company had an informal, “joking” culture and that the behavior was not severe. The plaintiff won a $500,000 settlement.

This goes back to what I said earlier about creating a culture that is non-tolerant of harassment in any form. Again, the threshold for harassment has been lowered and a pattern of behavior is no longer necessary to prove harassment. If one of your employees is offended by harassing conduct you face potential liability even if the majority of employees are not bothered by the behavior. Again, take complaints seriously and investigate claims right away.

Hurley v. Department of Parks and Recreation. In this case a manager had disclosed private information about a subordinate to a non-manager, violating the plaintiff’s right to privacy. This decision points up the fact that managers should only disclose information about subordinates on a need-to-know basis and never to non-managers. The manager in this case maintained a “drop file” on the plaintiff, containing work performance as well as private information. Private information about employees should only be stored in files maintained by human resources with proper confidentiality protections.

Important updates on the use of arbitration agreements in CA

Epic Systems v. Lewis. In this case the U.S. Supreme Court ruled that the National Labor Relations Act (NLRA) does not prevent employers from making mandatory arbitration agreements a condition of employment, even with a provision waiving the employee’s right to a class action claim.

Along these same lines, two other opinions favored employers with regard to arbitration agreements.

In Sonic Calabasas Al, Inc. v. Moreno, the court ruled that an employer may require an employee to resolve wage disputes through binding arbitration. In Iskanian v. CLS Transportation Los Angeles, LLC, the court rule that an employer may require an employee to pursue claims as an individual and not as part of a class action suit. If you have not implemented mandatory arbitration agreements, I suggest you seek legal advice about the pros and cons of implementing an agreement for your organization.

If you would like more information about any of these legal updates and how they apply to your organization, please contact me for a consultation. Michelle@connecttohr.com.

Walk the Talk: Creating a Culture of Diversity, Inclusion and Belonging

As competition for attracting and keeping top talent heats up, companies who demonstrate that they have a culture of diversity and inclusion will have a significant advantage. Not only are these companies likely to perform better financially, as we discussed in my last blog, they are also more likely to engage and retain their high performing employees. And…attract new ones!

According to LinkedIn Talent Solutions’ 2018 Global Recruiting Trends report, “diversity is the biggest game-changer” among recruiting trends for 2018. Seventy-eight percent of their survey respondents indicated that diversity is very or extremely important in shaping their recruiting and hiring efforts for 2018. And it’s not just diversity – it’s diversity, inclusion, and belonging, all key elements in attracting, engaging and retaining employees.

Companies are focusing their efforts on a wide definition of diversity, including gender (71%), racial and ethnic (49%), age/generational (48%), educational (43%), disability (32%), religious (19%) and other (6%).

Yet despite this focus, companies still have a challenge in attracting diverse candidates. Here are some things to consider as you work on making your candidate pool more diverse, and your culture one of diversity, inclusion and belonging.

Demonstrate your commitment to diversity through the images on your website and in recruiting collateral. Show that you walk the talk.

Review job posting language through the lens of diversity and inclusion. Words matter. Terms such as “rockstar, “ninja” or “guru” may discourage some perfectly qualified people from applying. Use gender neutral language. Sometimes it’s as simple as changing “manage” to “develop.” A recent KQED article noted that “if you say manage a team, the applicants are primarily male. If you say develop a team, it tends to be female. And when you say lead a team, it tends to be neutral.”

Emphasize the impact of the role. Studies show that men will apply for jobs when they meet only 60% of the requirements, whereas women don’t feel confident to apply unless they meet 100% of the requirements. Consider only including the must-have requirements (versus adding all of the nice-to-haves) and focusing more on the impact the candidate would make in the position.

Be sure diversity is reflected in your culture. Consider incorporating things like time off for important holidays for diverse religions, providing parental leave, and implementing LGBTQ-friendly policies. Identify and eliminate workplace practices and attitudes that are anti-diversity-inclusion-belonging.

Confirm your commitment to diversity and inclusion on a regular basis by ensuring that teams, projects, promotions and other opportunities are open to the broader definition of diverse individuals – gender, ethnicity, points of view, sexual orientation, etc.

If you need help in incorporating diversity into your hiring practices and/or culture, please contact me at michelle@connecttohr.com.

New Criminal History “Ban the Box” Law Takes Effect January 1, 2018

A new law recently signed by Gov. Jerry Brown will prohibit employers in California from including criminal history inquiries on employment applications before making a conditional offer of employment. AB 1008 applies to all California employers with 5 or more employees and will go into effect January 1. California has had a “ban the box” law for city, county and state employers since 2014. The new law extends the ban to private sector employers. Fifteen local jurisdictions, including San Francisco and Los Angeles, already have such private sector bans in place.

The goal is to give Californians with a prior arrest or conviction a fair chance at finding a job and moving forward.

AB 1008 makes it unlawful for employers to:

Include questions on employment applications about criminal history
Ask about or consider the conviction history of an applicant before the applicant receives a conditional offer of employment; and
Consider, distribute, or disseminate information about arrests that did not result in a conviction.

The bill also requires that, before rejecting an applicant based on criminal history, the employer must first make an “individual assessment” to determine whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job. The employer must consider each of the following:

The nature and gravity of the offense or conduct;
The time that has passed since the offense or conduct and completion of the sentence; and
The nature of the job held or sought.

If the employer makes a preliminary decision not to hire the applicant in part or solely due their criminal history, they must notify the applicant in writing and give them at least 5 business days to respond. If the applicant notifies the employer in a timely manner that they dispute the accuracy of the conviction history, and are taking steps to obtain evidence to prove its inaccuracy, the employer must provide the applicant 5 additional business days to respond. By law, the employer must consider the applicant’s response before making a final decision.

From a business perspective, banning “the box” can expand the pool of potential employees in what is a very competitive market. Individuals with arrest records or convictions for even minor offenses often have difficulty getting that first opportunity to begin turning their life around. A former client of mine who gave someone that opportunity had a very positive experience. Through a program with the EDD, she hired someone who had served time for a minor offense to work in the company call center. The individual was anxious to get some experience, and to be able to support their family. The program had very specific requirements that the employee had to adhere to, e.g., weekly drug testing, and attending meetings with their parole officer. It turned out to be a win-win. The employer got a motivated employee, and the employee got a fresh start.

Remember that in light of the new law, AB 1008, you may need to make changes to your employment application form and hiring procedures. Please contact me if you need help in doing so.

HR Alert: Revised I-9 Form and New Employee Notice Requirement

Here are some recently-implemented requirements you should be aware of.

Revised I-9 Form Now Available

On July 17, the U.S. Citizenship and Immigration Services (USCIS) released a revised version of the Employment Eligibility Verification form, Form I-9. Employers may continue to use the existing form, with a revision date of 11/14/16 through September 17, 2017. As of September 18, employers must use the new form with a revision date of 07/17/17. Existing storage and retention rules still apply.

The revised I-9 form contains some minor changes to wording, as well as changes to Acceptable Documents List C. All changes are documented in the revised Handbook for Employers: Guidance for Completing Form I-9.

New Domestic Violence Employee Notice Required

As of July 1, employers with 25 or more employees are required to inform all employees, in writing, about protections for victims of domestic violence, sexual assault or stalking. The notice is a requirement of California Assembly Bill 2337, which was signed by Governor Jerry Brown last September, and outlines protections under Labor Code Sections 230 and 230.1. The California Labor Commissioner recently published a sample notice. The notice contains information on victims’ rights to accommodation and protections against discrimination and retaliation.

New Minimum Wage and Hiring Rules in Effect

As of July 1, the minimum wage has increased in a number of California cities. If you have employees in any of the following cities, be sure that you have changed their pay rates accordingly. Note that in some cities, the minimum hourly wage is based on the number of employees. Also, if an employee works in (or telecommutes from) a city with a higher minimum wage than the state, the employer must follow both the state wage requirements and the city’s wage requirements for that employee. The current minimum wage in the state of California is $10.50/hour for employers with 26 or more employees, and $10/hour for employers with 25 or fewer employees.

New minimum wages are as follows:

San Jose: $12/hour
Milpitas: $11/hour
San Francisco: $14/hour
San Leandro: $12/hour
Emeryville:
• $15.20/hour for companies with 56 or more employees
• $14/hour for companies with 55 or fewer employees
Los Angeles, Malibu, Pasadena, Santa Monica, and unincorporated areas in Los Angeles County:
• $12/hour for companies with 26 or more employees
• $10.50 for companies with 25 or fewer employees

Effective January 1, 2018, the state-wide minimum wage will increase to $11/hour for employers with 26 or more employees and $10.50/hour for employers with 25 or fewer employees.

Use of Criminal Histories in Hiring Decisions
Also effective July 1, the Fair Employment and Housing Council implemented new rules regarding the use of criminal history in hiring decisions.

The new rules require that employers consider whether their use of criminal histories will have an adverse impact on any protected class. If an applicant or employee claims that the policy or practice of using criminal histories has an adverse impact on a protected class, the employer will have to show that the policy was job-related and consistent with business necessity.

Employers must also be able to show that there wasn’t a less-discriminatory policy or practice that could have achieved the same result. Employer policies must allow for an individual assessment that considers the nature of the offense, how long ago it took place, and how it relates to the position, if at all.

In addition, applicants or employees must be notified if an adverse action will be taken because of their criminal history, and they must be given an opportunity to address any factual inaccuracies. If a record is shown to be inaccurate, it must not be considered.

Please note that the following criminal records should not be considered in California:

• Arrests that did not result in conviction (unless trial is pending)
• Detentions that did not result in conviction
• Sealed records
• Convictions that have been judicially dismissed, including through expungement
• Misdemeanor marijuana convictions more than two years old
• Participation in pre-trial or post-trial diversions programs
• Proceedings in juvenile court

If you have questions about a specific hiring situation, contact your employment counsel.

Creating a Culture That Promotes Good Behavior

In my past couple of blogs I’ve discussed harassment and bullying, how to recognize and prevent those behaviors, and the negative effects they can have on your business. But bullying and harassment are just two of many bad behaviors that can impact your business. Others include: unethical behavior, disrespect to customers or other employees, poor quality work, chronic lateness or absenteeism, and so on.

Establishing and communicating clear guidelines as to what is, and what is not, acceptable behavior is essential. It’s about creating a culture that promotes ethics, respect and integrity. Although we often think of company culture in terms of branding and perks, a strong company culture includes much more.

According to Harvard Business School Professor James L. Heskett, “effective culture can account for a 20-30% of the differential in corporate performance when compared with ‘culturally unremarkable’ competitors.”

So how do you create a great culture that promotes good behavior? Start with clearly defined vision and mission statements, and a set of core values. Ensure that each and every employee understands and can articulate the vision, mission and values. Be clear and consistent about expected behaviors. Integrate the vision, mission, values and expectations into your new hire orientation, employee handbook, and leadership training. Be sure that leaders at every level are aligned with the culture and are modeling expected behaviors. Recognize employees who consistently demonstrate the values in their interactions with customers, vendors, team members and other employees.

Employees who know what the standards and expectations are feel more empowered and have an easier time making decisions. This is especially important in small companies where everyone knows one another and employees feel more like family. If the standards aren’t clear and consistent and periodically reinforced, the lines can get blurred.

Communicate, and most importantly, demonstrate to employees that your focus is on doing the right thing, and not just on increasing profits. When companies lead with ethical behavior, respect and integrity, employees are more likely to follow.

If you would like more tips on creating a positive culture, please contact me.

Achieving Growth Through Effective Workforce Planning

In my last blog, I discussed the importance of taking some time – now – to plan for the various HR activities that need to occur throughout the year. A good place to start is with your workforce planning. We all want to grow our businesses. But without a clear understanding of the knowledge and skills that will be required to move the business to the next level, this is a difficult goal to achieve.

Workforce planning helps consider the size, type and quality of the workforce you will need to achieve your company objectives. It helps you strategically recruit, hire and develop employees to ensure that you have the right people in the right place at the right time.

Workforce planning can include operational considerations such as work schedules and hours, distributing talent among divisions and departments, identifying functions no longer needed and reassigning workers, and maintaining employee engagement. The more strategic side of workforce planning looks at identifying skills sets needed as the company grows and changes, transferring company knowledge as employees leave, and defining recruitment strategy for future workforce needs.

An effective workforce plan keeps talent in the pipeline for when you have an immediate need. It improves your bench strength by helping you identify and prepare future leaders. And it ensures that you are ready for future opportunities.

Start by defining job roles: the work that needs to be done, and the skills and competencies required for that work. If you’re starting from scratch, you may want to use an employee who is currently doing the work successfully as a model to identify required skills, experience and behaviors, but remember that a job should be designed around the role requirements, not a particular person.

Once you’ve defined and designed the critical job roles to meet your needs today, spend some time thinking about skills/job roles you may need in the future. This will be helpful in identifying skill gaps, and determining whether it makes more sense to hire for those skills gaps or to develop current employees to fill the gaps.

Next, create formal job descriptions. Job descriptions should be reviewed and updated at least annually, and whenever someone leaves. Job descriptions should be as detailed as possible. This will help you recruit the right person for the job. It will also give you a legally defensible document, or ‘benchmark’ for performance management. Be sure your job descriptions include at least the following:

Job title
Job location
A summary of the job objective/purpose
Scope of responsibility
Reporting relationships
Qualifications required (experience, skills, competencies)
Key functions and duties (including standards)
Physical requirements of the job

Please contact me if you need help creating your workforce strategy.

When Hiring, Be Clear About Work Environment

One of the areas I help my clients with is performance management – both setting up performance management processes, and dealing with performance issues. Lately I’ve been finding that a number of organizations are struggling with issues related to new employees adapting to a small company work environment.

In small companies, where a gap in resources can make a huge impact, hiring managers are often so focused on filling the gap that they don’t take the time to go beyond simply matching qualifications to requirements. However, if they neglect to give the candidate a clear understanding about the work environment, they could be looking at performance issues down the road.

Take, for example, a candidate who is used to working in a large, structured organization, where roles are narrowly defined, and processes and procedures are well-established and documented. They are deeply knowledgeable about their own role, but have traditionally delegated to others responsibilities that don’t fall within the definition of that role. Unless they are told otherwise, when this candidate becomes an employee they may assume that it’s “business as usual.” I do my job and others do theirs.

A small company environment, however, is very different from a large, structured organization. People wear multiple hats, processes are often established on the go, and there are typically many things going on at once. The ability to prioritize is essential.

One of the most important components of effective performance management is managing expectations. This begins in the hiring process. As a hiring manager, help potential employees understand not just what the job requires, but also what working successfully in the company environment requires. Present them with realistic scenarios about what they might be asked to do in their role. Ask behavioral questions to determine how flexible they are, and how they prioritize. Ask them to describe a situation when they were asked to do something out of their job scope. How did they handle it? What was their comfort level?

Performance issues generally have one or more of these three root causes: 1) lack of ability, 2) lack of training or information, 3) lack of motivation. Do your best to avoid these by taking the time to ask good questions, and provide clear expectations during the hiring process.

If you need help with developing an effective hiring process, please contact me.

5 Budget-Friendly Employee Development Ideas

Surveys show that one of the key factors in keeping employees engaged and motivated is the opportunity to learn and grow. For small companies, however, who often have limited (or non-existent) training budgets, providing those opportunities can be a challenge. Yet there are a variety of ways you can develop your employees without a lot of expense. Here are five of them.

Cross-training. Consider putting together a program where employees cross-train each other. Not only will the “trainee” learn new skills and knowledge, the “trainer” will improve in their job by having to teach it to someone else. This also can build closer relationships in the organization and a better understanding of the company overall. When employees learn what others on their team and other teams do, they have a better appreciation of how all the roles fit together to keep the company operating. It can eliminate silos and increase organizational communication.

Internal skill sharing. Identify employees who are particularly skilled in an area and give them the opportunity to share their knowledge in a workshop or “Lunch and Learn.” This increases the knowledge of the participants, and gives the employee sharing the knowledge the opportunity to develop and improve additional skills – leadership, facilitating, organization, communication, etc.

Mentoring. Create a mentoring program or identify individuals who can coach others in areas where they’re struggling or want to develop. This is a great way to tap into the knowledge and skill base of your more experienced employees to ensure that your company mindshare gets transferred. And the beauty about mentoring relationships is that there are benefits to both mentor and mentee as they learn from each other.

Online courses/books. There are myriad free and low cost online courses available on a variety of topics from business knowledge to leadership skills to software. Books are another way to provide learning. Consider setting up a small library or book sharing program.

Special projects and stretch assignments. On-the-job training through a special project or stretch assignment can be very effective when combined with adequate management support and/or a mentor or coach. Have a special project coming up? Consider assigning someone who wants to develop leadership skills to head up the project.

Be sure that you include in your employee development program not just the job-related skills tied to your future needs, but also soft skills that have been identified as essential for the 21^st century: communication, emotional intelligence, collaboration, problem solving, and adaptability.

Recognize that the time spent in learning activities – whatever those may be – is an investment in the growth of the company and in the growth and satisfaction of employees.

“An investment in knowledge pays the best interest.” – Benjamin Franklin

Update: Federal and State HR Laws

In my last blog I talked about the change in the minimum salary requirement for exempt employees that goes into effect in December. Here are some other HR-related legal updates that may also affect you.

State Disability Insurance eligibility waiting period. The waiting period for State Disability Insurance eligibility has changed for individuals who file a second disability claim for the same condition or a condition related to the initial claim. SB 667, which went into effect July 1, waives the 7-day waiting period for the second claim if it is filed within 60 days after the initial disability benefit period. The bill also extends to 60 days (from 14 days) the time between claims for the same or related cause or condition to be considered one disability benefit period.

Wage garnishment. SB 501, effective July 1, reduces the prohibited amount of an individual judgment debtor’s weekly disposable earnings that may be garnished based on a withholding order.

Electronic Unemployment Insurance reporting. Starting January 1, 2017, employers with 10 or more employees will be required to electronically submit their unemployment insurance reports to the Employment Development Department. Under the new requirements, employers must also remit contributions for unemployment insurance premiums by electronic funds transfer. The requirement will apply to all employers beginning January 1, 2018.

California minimum wage. SB 3, signed by Governor Brown in April, will increase California’s minimum wage annually, reaching $15/hour by January 1, 2022. For employers with 26 or more employees the minimum wage will increase per the following schedule:
January 1, 2017 – $10.50/hour
January 1, 2018 – $11/hour
January 1, 2019 – $12/hour
January 1, 2020 – $13/hour
January 1, 2021 – $14/hour
January 1, 2022 – $15/hour

Employers with 25 or fewer employees will be on a schedule one year behind the above schedule, reaching $15/hour on January 1, 2023.

In my next blog I’ll talk about changes at the county and city level. It’s important to keep your Employee Handbook up to date to ensure you are in compliance as requirements change. Please contact me if you are interested in a mid-year review of your manual.