Small business owners must be diligent to comply with slew of new laws and regulations
by Tom Scott, NFIB/CA State Executive Director
The California Legislature enacted a dizzying array of new bills last year—with Governor Jerry Brown signing more than 900 into law. With job growth stagnant and small business optimism unclear here in California, hundreds of new laws and regulations on the books this year present new burdens and risk of non-compliance for businesses across the state. Although NFIB California led the way in blocking a bill that would have further mandated protected leave obligations for employers, for example, unfortunately many of the bills we opposed were approved and enacted into law.
Yet there is no sugar-coating the fact that many of the newly enacted laws will prove burdensome for small business—especially with California’s escalating minimum wage. Other regulatory changes will require attention to ensure full compliance to avoid costly penalties or costly lawsuits. Here is a quick overview of the most pertinent new laws in 2017 affecting small business:
MINIMUM WAGE HIKES
Employers with 26 or more employees are now required to pay a minimum wage of at least at least $10.50 per hour. Companies with fewer employees are still subject to the preexisting $10.00 standard this year. But, beginning in January of 2018, minimum wage will rise to $10.50 even for the smallest company, while larger firms will be required to pay $11.00. Under the new minimum wage schedule, employers can expect incremental increases through 2023 when all California businesses will be required to pay $15.00 per hour. Of course many local cities and counties have varying, more aggressive minimum wage requirements beyond this statewide mandate.
CLARIFICATION OF MEAL & REST BREAK RULES
It remains vital for employers to know and understand California’s stringent requirements on meal and rest break periods because small business owners often face serious lawsuits over alleged violations. At a minimum, small business owners should know that hourly employees are entitled to a paid ten-minute break in the middle of each of four-hour shift, and a meal period of at least 30 minutes by the five hour mark, and potentially a second meal period if they work 10 or more hours.
RESTRICTIONS ON SEEKING DOCUMENTATION ON LEGAL STATUS
California employers are now prohibited from requesting any form of documentation to verify an employees’ legal status in the United States beyond what is required by federal law. This law also prohibits employers from questioning the authenticity of documents that appear genuine on their face, and from reexamining the legal status of an existing employee after complying with federal I-9 requirements. Consequentially, U.S Citizenship and Immigration Services just released a new I-9 form, which employers must use to verify the identity and employment authorization of each person they hire.
MAINTAINING A DRUG-FREE WORKPLACE AFTER LEGALIZATION
In November, California voters approved an initiative legalizing recreational use of marijuana. While this is a major change in state law, it is important to understand that employers still have the right to enforce a drug free workplace. Accordingly, this may be a good time to update or clarify your company policies. NFIB Legal Center offers a free Model Employee Handbook, as well as further guidance on how you can maintain a safe and drug-free workplace in this webinar: “Marijuana In The Workplace: Strategies For Breaking Through The Haze.”
RESTRICTIONS ON REQUESTING INFORMATION ON CRIMINAL HISTORY
Beginning this year, California employers are now prohibited from inquiring as to a job applicant’s criminal history during his or her juvenile years. AB 1843 now precludes employers from considering, or even asking about, arrests or convictions while the applicant was subject to the jurisdiction of the juvenile courts. At this time, it remains legal to inquire about criminal convictions as an adult; however, California business owners should be cognizant of the trend toward municipal and county ordinances banning employers from making even these inquiries. For example, Los Angeles recently joined with San Francisco and other local jurisdictions in enacting “ban the box” legislation.
NEW REQUIREMENT TO MAKE ELECTRONIC SUBMISSIONS TO EDD
Beginning this year, businesses with 10 or more employees must electronically submit all tax returns, wage reports and payroll deposits with the Employment Development Department. Additionally, companies with fewer employers will be required to make electronic submissions beginning next year. All employers will be required to make electronic submissions in 2018.
UNISEX BATHROOM LABELING REQUIREMENTS
Beginning in March, AB 1732 requires businesses to label “single-occupancy” restrooms as “all gender.” Although the statute is unclear at to its enforcement mechanism, it expressly authorizes government officials to inspect bathrooms for proper signage. Accordingly, business owners would be wise to comply to avoid the risk of penalties or threat of lawsuits.
NEW NOTICE REQUIREMENTS EFFECTIVE IN JULY
Beginning in July, AB 2337 will require employers to provide notice to their employees of time off and accommodation rights established by already existing law protecting victims of domestic violence, sexual assault and or stalking. Specifically, employers should know that they are strictly prohibited from taking any sort of adverse action against an employee for taking time off to deal with these traumatic events.
Tom Scott is the State Executive Director for NFIB California, which represents 22,000 dues-paying small business members across the state.
