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That’s California

Employment Law Blog

Daniel J. Turner on May 9, 2018



In the wake of recent and high profile sexual harassment cases and the continued gap in wages between men and women, the California Legislature is on the verge of making significant changes to the Fair Employment and Housing Act.  The following is a brief summary of the various proposals working their way through the California State Assembly and State Senate:

Assembly Bill 1870:  Extends the statute of limitations for a person to file a complaint with the Department of Fair Employment and Housing ("DFEH") from one year to three years.  Proponents of AB 1870 argue that extending the time to file a claim with the DFEH will allow parties “additional time to resolve grievances outside of court, without feeling compelled to file a claim in order to meet” the current one-year filing deadline.  In addition, supporters of AB 1870 point out that the statute of limitations for personal injury in California is two years and that employees alleging harassment and discrimination should have time to file their claims with the DFEH commensurate with other types of civil actions. 

AB 1870 is supported by, among others, the California Employment Lawyers of America, the Anti-Defamation League and the American Civil Liberties Union of California Center for Advocacy and Policy.  The California Chamber of Commerce, the California Restaurant Association and the California State Association of Counties are among those opposing the proposed change.

The Assembly Labor and Employment Committee passed AB 1870 by 6-0 vote on April 18, 2018 and referred the bill to the Appropriations Committee for further consideration.

Senate Bill 1284:  Requires employers with 100 or more employees to submit a detailed “annual pay data report” to the Department of Industrial Relations (“DIR”) by September 30 each year.  The annual pay data report – which will be made available to the Secretary of State, the DFEH and the Commission on the Status of Women – must include the number of employees by race, ethnicity, and sex in the each of the following categories:  executive or senior level officials and managers; first or mid-level officers and managers; professionals; technicians, sales workers; administrative support workers; craft workers; operatives; laborers and helpers; and service workers.  In addition, the data report “shall identify each employee’s total earnings as shown on the Internal Revenue Service Form W-2 for a 12-month period looking back from any pay period between July 1 and September 30 of each reporting year.”  If an employer operates multiple establishments, the employer “shall submit a report for each establishment and a consolidated report that includes all employees.”

Senate Bill 1284 also provides that employers failing to comply are subject to a civil penalty of five hundred dollars ($500) and that any civil penalties collected must be deposited into the Labor Enforcement and Compliance Fund and – upon appropriation by the Legislature – would be allocated to the DLSE to enforce pay equity requirements.  Senate Bill 1284 made it out of committee on a 5-2 vote and is currently before the Appropriations Committee. 


Golden State To Increase Monetary Benefits Available As Of January 1, 2018

California was the first state in the nation to offer paid family leave.  Today, it remains one of only a handful of states in the country to offer such a program.  Since its implementation in 2004, Californians who have the SDI deduction taken from their paychecks - including all employees and self-employed individuals who choose to contribute - are eligible to receive partial wage replacement benefits through the state’s Employment Development Department for up to six weeks, in order to bond with a new baby or care for a seriously ill family member, among other reasons.  Wage replacement funds are also available to Californians who are placed on a disability leave by their physicians.

Effective January 1, 2018, California has made changes to the benefits available to workers.  Going forward, eligible workers will receive 60 to 70% of their gross wages while on Paid Family Leave, depending on their income level.  Previously, only 55% of gross wages were provided.  Similar financial adjustments have been made to increase the state’s disability payments.  In addition, the state has done away with the waiting period that previously forced Paid Family Leave participants to go without financial benefits for a week at the start of their leaves. In another change, benefits are now capped at an increased amount of $1,216.

Employers and employees alike should note that the receipt of financial benefits from the EDD does not necessarily mean that an impacted employee is entitled to or has fulfilled the requirements necessary to receive job-protected leave.

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