PIHRA – LEGISLATIVE AFFAIRS
BILLS OF INTEREST
The PIHRA Legislative Affairs Committee has been tracking a number of bills of interest to HR professionals that were pending in Sacramento during 2008. Of those that passed the legislature and made it to the governor’s desk, most were vetoed. We have prepared a summary of those bills that were acted on by the governor.
The summaries below begin with the bills that were signed into law (after the governor signs them, they are given a chapter number). These bills take effect January 1, 2009. Following that is a brief update on some new developments for employers with employees in San Francisco. We conclude with summaries of the bills the governor vetoed, arranged by subject matter.
CHAPTERED BILLS: NEW LAWS
AB 2075 - Wages: Execution of Release of Claim or Right (Chapter 224): Labor Code section 206.5 prohibits an employer from requiring an employee to execute a release of a claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of those wages has been made. Violation of this provision is a misdemeanor, and the release is null and void. AB 2075 modifies existing law to define “execution of a release” to include requiring an employee, as a condition of being paid, to execute a statement of the hours he or she worked during a pay period which the employer knows to be false.
SB 940 – Temporary Employees: Wages (Chapter 169): Pursuant to this bill, wage payments by a “temporary services employer” to an employee assigned to a client “are due and payable no less frequently than weekly, regardless of when the assignment ends, and wages for work performed during any calendar week shall be due and payable not later than the regular payday of the following calendar week.” If an employee of a temporary services employer is assigned to work for a client on a day-to-day basis, that employee's wages are due and payable at the end of each day (which is also true if the employee is working for a client engaged in a trade dispute). These provisions do not apply if the employee is assigned to work for a client for over 90 consecutive calendar days, unless the employer pays weekly. The bill adds section 201.3 to the Labor Code.
AB 10 – Computer Professionals: Wages (Chapter 753): If a computer professional is engaged in work that is primarily intellectual or creative and requires the exercise of discretion and independent judgment, among other requirements, he may be exempt from overtime compensation rules under section 515.5 of the Labor Code. To qualify, he must earn a certain hourly rate of pay ($37.94 for 2009). AB 10 amends this section to provide that if the employee is paid a salary, the exemption applies so long as the employee earns an annual salary of not less than $79,050 for full-time employment and is paid at least once a month in an amount not less than $6,587.50 (these amounts, which were set by the Department of Industrial Relations) will change annually).
SB 28: Motor Vehicles: Cell Phones: Text Messages (Chapter 270): Effective July 1, 2008, it became illegal in California to drive a car while using a wireless telephone, unless the phone could be operated hands-free. With the passage of AB 28, effective January 1, 2009, it will be illegal to “write, send, or read a text-based communication” using an electronic wireless communications device while driving. A “text-based communication” includes a text message, instant message, or electronic mail. A violation of the law will result in a fine of $20 for the first offense, and $50 for each subsequent offense. The restrictions in the law do not include reading, selecting, or entering a telephone number or name in an electronic wireless communications device for the purpose of making or receiving a telephone call. If you have a company policy placing restrictions on the use of cell phones while driving on company business, you may want to amend it to reflect this new limitation.
SB 1168 - Health Care Coverage: Dependent Children (Chapter 390): Under this bill, if a health care service plan or health insurance policy provides coverage for a dependent child who is over 18 years of age and enrolled full-time at a secondary or postsecondary educational institution, that coverage shall not terminate, for a period not to exceed 12 months or until the date on which the coverage is scheduled to terminate pursuant to the terms and conditions of the policy, whichever comes first, if the dependent child takes a medical leave of absence from school. Certification of the need for the leave must be provided within specified time periods.
AB 1894 - Health Care Coverage: HIV Testing (Chapter 631): Of the numerous mandated benefit bills pending in the legislature this year, this is the only one that was signed. AB 1894 will require health care service plans and health insurers issuing individual or group contracts or policies, on or after January 1, 2009, to provide testing for human immunodeficiency virus (HIV) regardless of whether the testing is related to a primary diagnosis.
SAN FRANCISCO
San Francisco Health Care Security Ordinance: Oral argument in the case challenging the validity of the Health Care Security Ordinance (“HCSO”) took place before the Ninth Circuit in April. This ordinance requires employers to pay a designated amount on employee health care. The court issued its decision on September 30th, upholding the HCSO and concluding that it is not preempted by ERISA. Employers who are subject to the ordinance must continue to comply.
San Francisco Commuter Benefits Ordinance: Effective January 19, 2009, employers must provide San Francisco-based employees with commuter benefits. The new ordinance applies to employers with 20 or more employees. In counting up the number of employees, employers must include all those who work full-time, part-time, or on a temporary basis, even those who work outside San Francisco. The benefit must only be extended to employees who work at 10 hours a week within the geographic boundaries of San Francisco, however. Employers must provide employees with the option to make a pre-tax election under an IRC section 132(f) plan, an employer paid transit benefit (such as through the purchase of transit passes), or employer provided transit (such as a van pool). Employers who do not comply could be subject to penalties. More information may be found at www.commuterbenefits.org or www.sfenvironment.org.
VETOED BILLS
LABOR & EMPLOYMENT
AB 437 – Statutes of Limitation (Vetoed): AB 437 would have rejected, for purposes of California law, the United States Supreme Court’s opinion in Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct. 2162 (2007) addressing when statutes of limitations accrue in discrimination cases. The governor found the bill “poorly crafted,” which he felt could create uncertainty.
AB 2279 – Employment: Medical Marijuana: Qualified Patients and Caregivers (Vetoed): This bill would have declared it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment or otherwise penalize a person, if the discrimination is based upon the person’s status as a qualified patient or if it is based on failing to pass a drug test due to the use of medical marijuana.
AB 2874 – Employment Damages (Vetoed): The California Fair Employment and Housing Act limits the total amount of actual damages that the California Fair Employment and Housing Commission may assess against a respondent for a violation of the California Civil Rights Act of 2005, per aggrieved person, to $150,000. AB 2874 would have deleted the $150,000 limitation on actual damages.
AB 2918 - Employment: Use of Consumer Credit Reports (Vetoed): AB 2918 would have prohibited someone from obtaining a consumer credit report for employment purposes (with the exception of certain financial institutions) unless the information is either (1) substantially job related (such as the person is highly compensated or in a managerial position, works for a government agency and has access to money or confidential information, or is in a law enforcement position), or (2) required by law to be disclosed to or obtained by the user of the report. The governor vetoed the bill on the grounds that it would increase employer exposure to suits over the use of credit checks, would increase administrative costs, and would become a new employer obstacle to the use of available information needed to make hiring decisions.”
AB 3063 – Employment: Criminal History (Vetoed): This bill would have prohibited an employer from asking an applicant for employment to disclose, or utilizing in an employment-related decision, information concerning a criminal conviction the record of which has been judicially ordered sealed, expunged, or statutorily eradicated, or information concerning a misdemeanor conviction for which probation has been successfully completed or otherwise discharged and the case has been judicially dismissed.
SB 1113 - Attorney's Fees and Costs (Vetoed): This bill would have authorized a court to award not only attorney’s fees, but also costs and expert witness fees if someone successfully pursues a case that results in the enforcement of an important right affecting the public interest.
SB 1583 - Employment: Independent Contractors (Vetoed): SB 1583 would have provided that a person who, for money or other valuable consideration, knowingly advises an employer to treat an individual as an independent contractor to avoid employee status shall be jointly and severally liable with the employer if the individual is not found to be an independent contractor. A person who provides advice to his or her employer or an attorney who provides legal advice in the course of practicing law would have been exempt. In vetoing this bill, the governor explained that he considers existing law on the distinction between employees and independent contractors “confusing to employers.” He added, “I encourage the Legislature to focus on addressing the confusion caused by current law, not punishing those trying to create and grow jobs in California.”
LEAVES OF ABSENCE
SB 1661 - Unemployment Compensation: Paid Family Leave (Vetoed): SB 1661 would have provided that, under the Paid Family Leave program, an individual shall be deemed to have left his or her most recent work with good cause if the individual’s discharge or quitting from an employer was the result of the individual taking a leave to bond with a minor child under the family temporary disability insurance program, and the individual is subsequently found eligible for benefits under that program. The governor’s veto message explained: “When the paid family leave program was created in 2003, job protections provided for other types of leave were intentionally left out of paid family leave. This bill creates a backdoor to such protections and would disproportionately impact small businesses at a time of economic uncertainty. In addition, this bill would place additional strains on the Unemployment Insurance Trust Fund at a time that fund is facing solvency issues.”
WORKERS’ COMPENSATION
SB 1115 - Workers' Compensation: Permanent Disability Reports (Vetoed): This bill would have provided that race, religious creed, color, national origin, age, gender, marital status, sex, or genetic predisposition shall not be considered to be a cause or other factor considered in any determination made in any report by a physician addressing the issue of permanent disability.
SB 1717 - Workers' Compensation: Permanent Partial Disability (Vetoed): SB 1717 would have eliminated the provisions of existing law requiring an employer to pay an injured employee a decreased amount of permanent disability benefits if, within 60 days of a disability becoming permanent and stationary, the employer offers the injured employee regular work, modified work, or alternative work, within those specified time periods, regardless of whether the injured employee accepts or rejects the offer. In his veto message, the governor explained that, in light of proposals to increase premiums for workers’ compensation coverage, “the billion dollar benefit increase proposed by this bill cannot be justified at this time.”
INSURANCE & HEALTH BENEFITS
SB 840 - Single-Payer Health Care Coverage (Vetoed): SB 840 would have created a system through which all California residents would be eligible for health care benefits through a single-payer government program.
SB 1440 - Health Care Coverage: Benefits (Vetoed): SB 1440 would have required full service health care service plans and health insurers to expend on health care benefits no less than 85% of the aggregate dues, fees, premiums, and other periodic payments they receive with respect to plan contracts or policies issued, amended, or renewed on or after January 1, 2011. In vetoing this bill, the governor said he did not want to see a “piecemeal approach to health care reform.”
MANDATED HEALTH INSURANCE/HMO BENEFITS
AB 16 - Human Papillomavirus Vaccination (Vetoed): AB 16 would have required group and individual HMO contracts and insurance policies, effective January 1, 2009, to provide coverage for a human papillomavirus vaccination upon the referral of the licensed health care practitioner who is providing care to the patient and operating within the scope of his or her practice, in accordance with the recommendations of the Advisory Committee on Immunization Practices to the Centers for Disease Control and Prevention.
AB 30 - Health Care Coverage: Phenylketonuria: Metabolism Error (Vetoed): AB 30 would have expanded existing law by requiring all HMO contracts and health insurance policies, effective January 1, 2009, to provide coverage for the treatment of inborn errors of metabolism. This mandate would have included providing coverage for formulas and special food products that are part of a prescribed diet, if the diet was deemed medically necessary and other conditions were met.
AB 54 - Health Care Coverage: Acupuncture (Vetoed): Under existing law, HMOs and health insurers that issue group contracts and policies are required to offer coverage for acupuncture treatment, under terms and conditions that may be agreed upon between the HMO/insurer and the group policyholder (these terms do not apply to any contract/policy covering public entities). AB 54 would have changed the law to require the coverage.
AB 368 – Hearing Aids (Vetoed): Under this bill, on or after January 1, 2009, every insurer or HMO that issues, amends, or renews an individual or group policy or contract would have been required to offer coverage for hearing aids, up to one thousand dollars ($1,000), to all covered persons under 18 years of age.
AB 1887 - Health Care Coverage: Mental Health Services (Vetoed): Under existing law, a health care service plan contract and a health insurance policy are required to provide coverage for the diagnosis and treatment of severe mental illnesses of a person of any age. Existing law does not define “severe mental illnesses” for this purpose but describes it as including a list of several conditions. AB 1887 would have expanded this coverage requirement for certain health care service plan contracts and health insurance policies issued, amended, or renewed on or after January 1, 2009, to include the diagnosis and treatment of a mental illness of a person of any age and would have defined mental illness for this purpose as a mental disorder defined in the Diagnostic and Statistical Manual IV (“DSM IV”), and would have included substance abuse. The governor’s veto message explained that he remains committed to a comprehensive solution to health care reform. As for mandates, this “mandate is estimated to increase health care costs for the insured population by over $110 million annually. Mandates like these are a significant driver of cost and mean some individuals may lose their coverage and not receive health care at all.”
AB 1962 – Maternity Services (Vetoed): Under this bill, health insurers offering individual or group policies issued, amended, renewed, or delivered on or after January 1, 2009, would have had to provide coverage for maternity services. The governor’s veto message stated as follows: “A mandate, no matter how small, will only serve to increase the overall cost of health care. I want to decrease the number of uninsured Californians.”
SB 1198 - Health Care Coverage: Durable Medical Equipment (Vetoed): SB 1198 would have required a health care service plan and a health insurer to offer coverage for durable medical equipment and services under terms and conditions that would have been agreed upon between the group subscriber and the plan or carrier.
SB 1634 - Health Care Coverage for Cleft Palates (Vetoed): This bill would have required, on and after January 1, 2009, health care service plan contracts and health insurance policies to cover orthodontic services deemed necessary for medical reasons for cleft palate procedures, subject to prior authorization and utilization review.