California Employment Law Update

New Transgender Identity and Expression Regulations (July 1, 2017)

In May 2017, the California Department of Fair Employment and Housing (DFEH) approved new regulations regarding transgender identity and expression in the workplace. The regulations become effective July 1, 2017.

The new rules further expand the Fair Employment and Housing Act’s (FEHA) role in preventing discrimination in employment and housing on the basis of gender identity. In addition, the regulations describe some new policies that employers must implement, including the following:

Restroom Facilities

Employers are now required to provide equal access to facilities regardless of the sex of the employee. Employees must be permitted to use facilities that correspond to the employee’s gender identity or gender expression. Employers must use gender-neutral signage for single-occupancy facilities under their control. They cannot require any proof of sex or gender for an employee to use a particular facility.


The new regulations add a definition of “transitioning” and prohibit discriminating against an individual who is transitioning, has transitioned, or is perceived to be gender transitioning. Transitioning is defined as a process in which an individual begins living as the gender with which they identify and can include changes in name usage, participation in employer-sponsored activities, undergoing hormone therapy, etc.

Dress Standard

An employer cannot impose a dress standard that is inconsistent with an employee’s gender identity or expression in the absence of a business necessity.

Preferred Name and Identity

The new regulations require employers to abide by an employee’s request to be identified by a certain name or a certain gender identity. Employers can only insist on using an employee’s legal name or gender if it is otherwise required to meet a legally-mandated obligation.


An employer cannot inquire or require documentation on sex, gender, gender identity, or gender expression as a condition of employment.

Employers should ensure their policies comply with these new regulations regarding transgender identity and expression before July 1, 2017. Employers should also review their employee handbooks to make sure any policies contained therein comply with the new regulations.


Special thanks to Cole Lewis, Summer Associate, for his assistance in preparing this alert.

DFEH Releases Guidelines On Preventing and Correcting Harassment

Last month the Department of Fair Employment and Housing (DFEH) announced the release of a new guide for California employers on the steps they should take to prevent and correct workplace harassment. The nine page document provides employers with a helpful FAQ-style guide to maintaining an effective anti-harassment program, appropriately responding to employee complaints, and conducting fair investigations.

The DFEH also issued a revised poster and brochure that details California’s legal protections against sexual harassment and the steps that all California employers must take to prevent and correct sexual harassment. Although the updated sexual harassment poster is not one of the posters required by the DFEH, its posting can contribute to promoting and maintaining an effective program to eliminate sexual harassment.

Employers should make use of these new and updated resources to ensure that their anti-harassment programs and investigative mechanisms live up to the standards outlined by the DFEH.

Handful of State “Job Killer” Bills Move On to Second House

According to reporting from the California Chamber of Commerce, several recently introduced bills have passed the California State Senate or Assembly and now move on to a vote in the second house. These bills include:

  • Assembly Bill 1209 – requires California employers with more than 250 employees to collect data on the mean and median salaries paid to men and women under the same job title or descriptions. Employers would then be required to publicly publish that data.
  • Senate Bill 63 – requires new maternity and paternity leave policies for small business owners (as few as 20 employees); specifically, the bill would provide for 12 weeks of protected employee leave for child bonding for those not otherwise covered by both specified state law regarding family care and medical leave, and the federal Family and Medical Leave Act of 1993. Small business owners who fail to comply with this bill, if enacted, would be subject to an increased threat of litigation.
  • Senate Bill 562 – would create a program to provide comprehensive single-payer health care coverage and a health care cost control system. In doing so, it calls for the legislature to develop an unspecified “revenue plan.” Such a plan would undoubtedly propagate new taxes on individuals and businesses that in turn would penalize responsible employers and individuals.

We will continue tracking the progress of these bills as they continue to move through the legislature and/or are signed by the governor.

San Francisco Issues Guidance for the Application of the City’s Paid Parental Leave Ordinance

The City of San Francisco recently published new FAQs addressing provisions of its Paid Parental Leave Ordinance (the “Ordinance”).  The Ordinance, which went into effect on January 1, 2017 for employers with 50 or more employees, will begin to apply to employers with 35 or more and 20 or more employees on July 1, 2017 and January 1, 2018, respectively.  It provides supplemental compensation to employees receiving California Paid Family Leave (“PFL”) benefits to bond with a new child.  Specifically, under the Ordinance, employers are required to provide employees receiving state PFL benefits with supplemental compensation equal to the difference between the employee’s PFL benefit amount and the employee’s normal gross weekly wages such that the employee receives up to 100% of his or her weekly wages, subject to a weekly maximum benefit amount, for up to 6 weeks.

Among other things, the new FAQs clarify that:

  • To receive the benefits prescribed by Ordinance, employees must apply for both California PFL and San Francisco Ordinance benefits.
  • In addition, employees must have: commenced work for a covered employer at least 180 days before the start of the PFL payment period; worked at least 8 hours per week for the covered employer; and worked in San Francisco at least 40% of his or her weekly hours for the covered employer.
  • The threshold number of employees that triggers the requirements of the Ordinance for employers includes employees working or located outside of San Francisco. Seasonal, temporary, part-time and contracted employees are also counted toward the threshold number.  For employers whose workforces fluctuate from week to week, the Ordinance provides a look-back formula for calculating their workforces.
  • An employer is not required to pay supplemental compensation while the employee is serving his or her waiting period for California PFL, but only for the 6 weeks that the employee receives the PFL benefits.
  • An employer may, if it wishes, apply up to two weeks of an employee’s accrued and unused PTO or vacation time to cover the cost of the required supplemental compensation, but it may not apply the employee’s accrued and unused sick time for this purpose. With respect to the former scenario, employee agreement is required; however, an employee working for an employer with 10 or more employees must allow the employer to apply accrued PTO or vacation in excess of 72 hours.

California Labor Commissioner Issues New Guidance on Paid Sick Leave

The California Labor Commissioner’s Office recently issued new guidance regarding the application and administration of the state’s paid sick leave law.  The new guidance addresses the interplay between the law and grandfathered employer part time off (“PTO”) plans, as well as the interaction between employers’ disciplinary policies on employees’ use of paid sick leave.

Grandfathered PTO Plans

As for PTO plans that employers had in place at the time the law went into effect on January 1, 2015, the Labor Commissioner reinforced the statutory language (found at Cal. Lab. Code § 246(f)).  Specifically, the Commissioner confirmed that if, at the time the law became effective, an employer already had an existing PTO plan that made an amount of paid leave available that could be used for as many or more days and under the same or more favorable conditions than those specified in the law, that employer may continue to use the PTO plan and does not have to provide additional paid sick days in order to satisfy the law’s requirements.

As for grandfathered PTO plans, the Commissioner also explained that the paid sick leave law addresses only the rate of pay that must be paid for time taken off as paid sick leave (Cal. Lab. Code § 246(l)).  Therefore, if an employer is providing paid sick days through a grandfathered PTO plan, the paid sick leave law has no impact on the rate of pay the employer must pay for days that an employee takes off under the plan for purposes other than paid sick days, such as vacations or personal holidays.

Discipline for Unscheduled Absences

Finally, the Commissioner addressed the issue of discipline for an employee’s unscheduled absence from work as it relates to the paid sick leave law.  Specifically, the Commissioner clarified that the law does not protect all time off taken by an employee for illness or related purposes.  Rather, it prohibits disciplinary action only with respect to an employee’s use of accrued and available paid sick leave under the statute.  Therefore, an employer may not impose discipline for an unscheduled absence that occurs for purposes specified under the paid sick leave law (see Cal. Lab. Code § 246(l)) and for which the employee has available and uses accrued paid sick leave time.  The employer, may, however, impose discipline for unscheduled absences that occur for reasons other than those enumerated in the law, or for which the employee does not have or does not use accrued and available paid sick leave time.

Employers should note that local ordinances and state and federal disability and leave laws may further impact the employer’s obligations regarding the above items.

May 2017 California Employment Law Notes

We invite you to review our newly-posted May 2017 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

A handy guide for choosing and using employment practices liability insurance coverage

Thompson Reuters has just published our “handy guide” for choosing and using employment practices liability insurance (“EPLI”).  The article is attached.  There are a number of important things to keep in mind when considering your options and using these insurance policies if and when an employment claim is made or threatened.  Please let one of our employment or insurance lawyers know if we can be of assistance.

Employment Insurance article