Three California Laws Provide National Takeaways 10:45, January 3, 2017

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Three California Laws Provide National Takeaways

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Previously, we described national takeaways from California discrimination law that could apply to any employer in the United States. They still stand true. Similarly, a number of new California laws follow employment law trends throughout the United States. No matter where you operate, knowing what’s bubbling can help you to build an ethical and compliant workplace in 2017.

Gender-Neutral Bathrooms

Under Bill AB 1732, California employers, state agencies, and businesses that offer public accommodations must designate single-user bathrooms as “all-gender” toilet facilities- meaning traditional “male” and “female” designations will be illegal. The new law promotes “safety, fairness, and convenience,” as traditional gender designation “disproportionately impacts members of the LGBT community, women, and parents or caretakers of dependents of the opposite gender,” according to the Assembly floor analysis.

Gender-inclusive bathroom use is an evolving national issue and is firmly represented in federal law and policy. The US Occupational Safety and Health Administration (OSHA) considers gender-equal access to bathrooms to be a health and safety issue, while the Equal Employment Opportunity Commission (EEOC) interprets Title VII of the Civil Rights Act to require bathroom access for employees according to their gender identity. Additionally, at least one federal court has held that refusing to allow transgender employees bathroom access is evidence of sex discrimination under Title VII. All bathrooms, regardless of single-use designation, should be accessible by transgender employees. For a legal update on the most recent LGBT workplace protections, check out Steve Treagus’s post Workplace LGBT Law Update.

Employees Subject to California Law

Under SB 1241, employers cannot require any employee who “primarily resides and works in California” to litigate disputes outside California or submit to the laws of another state. Employees may void such a clause in contracts entered into on or after January 1, 2017. California seeks to protect “employees who are subject to arbitration clauses contained in standardized, take-it-or-leave-it, or ‘adhesive,’ contracts” from some employers who use them to avoid the robust worker protections laws of California.

Which state laws apply, and how, is a national issue that affects any employer with employees who work out of state. While this particular bill only affects employers (wherever they are headquartered) with California employees, it echoes a national debate about using contracts to direct employees where and how to raise disputes (often seen with arbitration clauses, but can even affect corporate bylaws).

Exempt Employees

Finally, AB 2535 explicitly spells out what makes an employee exempt for the purposes of pay stubs and total hours worked. Employers do not need to track hours, much less put them on a pay stub, for exempt employees.

This seems like a small and technical item, but classifying employees as exempt from overtime or other employee benefits affects any employer with a payroll. Misclassifying employees runs afoul of the Fair Labor Standards Act (FLSA), the federal wage and hour law. This can lead to misclassification enforcement actions by the US Department of Labor and private class action lawsuits that can rock a company’s compliance core. Reputations are at stake, as employers have been accused of “wage theft” when they do not pay minimum wage and overtime when they should.

How Ethics Comes In

Gender inclusiveness, giving employees more choices, and proper compensation policies are important compliance issues. But beyond the legal implications, these topics also involve ethics because employers have a choice when they grant equal access to bathrooms, make contracts, and pay wages. The laws reflect broader values like proper rewards, incentives, leadership, and fairness- hallmarks of effective compliance and ethics programs. Karen Peterson continues:

Creating and maintaining an ethical culture requires a sustainable effort. Periodic training for all directors, officers, relevant employees, agents, and business partners should cover policies and procedures and applicable laws, as well as provide case studies to practice skills in real-life situations. Ethics training should be delivered to all levels of the organization in a manner and in the language that is appropriate for the targeted audience.

LawRoom (powered by EverFi) delivers online compliance courses to help your business meet compliance requirements both dynamically and scalably. In addition to our award-winning online courses, LawRoom delivers a robust, cloud-based learning management system to help you easily deploy and track our growing library of ethics, anti-harassment, data security and employee conduct courses.

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Douglas Kelly
Douglas Kelly is EverFi's lead legal editor. He writes on corporate compliance and culture, analyzing new case law, legislation and regulations affecting US companies. Before joining EverFi, he litigated federal and state employment cases and wrote about legal trends. He earned his JD from Berkeley Law and BBA from Emory University.

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