New Year, New You (and New Rules, Too!)

Q:    Last year I opened a hand-rolled ice cream shop that I run with the help of my fifteen employees. Business is booming, so I want to hire more employees and open another location in early 2018. Are there any new laws I should know about before I expand my business?

A: Yes, indeed. Get out your note pads California employers, because your legislature has insisted on a few additions to your 2018 “resolutions.” Effective January 1, 2018, your employment operations will be affected as follows:

  • Employment Application Restrictions:
    • Conviction History: Employers with five or more employees, including state or local government employers, can no longer ask applicants, orally or in writing (i.e., on an application), about criminal history before a conditional job offer is given. Employers may consider results of a criminal background check after a conditional offer is made. However, if conviction history is a factor in denying employment to the applicant, the prior conviction must have a “direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.” The conditional offer can be rescinded due to conviction history, but the employer must inform the applicant of the rescission in writing, along with other various notification requirements, and provide applicant a chance to respond.[1]
    • Salary History: Employers, including state and local government employers, are prohibited from asking orally, in writing, personally or through an agent, for an applicant’s salary history. Applicants may voluntarily and without prompting disclose salary history, but an employer cannot rely on an applicant’s salary history information as a factor in determining whether to hire an applicant or what salary to offer an applicant. Employers must also provide a pay scale for an applicant’s position upon a reasonable request.[2]
  • Prohibition of Medical and Recreational Marijuana: While anyone 21 and older can now buy and consume marijuana in California, employers can still prohibit its use. Employers may still impose drug tests on employees, and may refuse to hire prospective employees or terminate employees who use marijuana. Employers may do so regardless of whether the use occurred on the job, and regardless of whether the use is medical or recreational, if that use conflicts with company policy.[3]
  • Harassment Training Requirements for Gender Identity, Gender Expression and Sexual Orientation: Employers with 50 or more employees must now include training on gender identity, gender expression, and sexual orientation harassment as a component of the recently mandated two hour sexual harassment that must occur every two years.[4]
  • Minimum Wage Increase: The minimum wage in California has increased to $10.50 per hour for employers with 25 or fewer employees. The minimum wage has increased to $11.00 per hour for employers with 26 or more employees. This also means that the minimum threshold for most exempt workers is increasing as it must be at least two times the minimum wage. As a reminder, minimum wage is increasing again soon and is scheduled to reach $15.00 per hour by January 1, 2023 for all employers, regardless of size.[5]
  • Extended Pregnancy Leave Requirements: Employers with 20 or more employees must provide eligible new parents up to 12 weeks of unpaid leave from work to bond with a new child. Previously, this requirement only applied to employers with 50 or more employees.[6]
  • Joint Liability for General Contractors: General contractors may now be held jointly liable for the wage and hour violations of their subcontractors under contracts signed after January 1, 2018. Only the following parties can pursue a claim under this law: (1) the Labor Commissioner; (2) a third party owed fringe benefit payments; or (3) a joint labor management cooperation committee. General contractors remain protected from penalties or liquidated damages. Moreover, general contractors can verify wages actually owed upon request, and withhold disputed wages if a subcontractor fails to provide requested information.[7]

If you have questions related to these new regulations, Baker Manock & Jensen’s employment attorneys would be happy to assist. Happy New Year and good luck sticking with those resolutions!


[1] Assembly Bill 1008

[2] Assembly Bill 168

[3] Proposition 64

[4] Senate Bill 396

[5] Senate Bill 3

[6] Senate Bill 63

[7] Assembly Bill 1701

This Legal Update / Bulletin is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. The hypothetical question is posed to illustrate a point and does not contemplate all potential legal considerations This update should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

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