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California Laws That Impact Your Business
Has Your California Business Overlooked These Insurance Needs?
January will bring new opportunities to your company, such as the start of a new fiscal year and possibly a new business plan. Because we work in California, a new year also means more laws and regulations for business owners to follow.
There is one very important change that will affect all companies with five or more employees. Think you’re exempt because you have two full-time employees and a handful of temporary staff or seasonal help? Not so fast. This new requirement counts temps and seasonal hires toward the total of five employees.
California’s goal is a noble one: helping employees feel safer at work.
While this change doesn’t link directly to your business insurance, it will affect many businesses, including our many corporate and small business customers. We want to make sure you’re aware of your obligations under this newly revised law.
In September 2018, California Governor Jerry Brown signed into law a number of bills related to workplace sexual harassment. The goal of these new regulations is to reduce workplace harassment and toughen sexual harassment enforcement.
The amendments to the state’s 1994 sexual harassment law — the California Fair Employment and Housing Act (FEHA) — were propelled by the #metoo movement and supported by many in California’s entertainment industry. However, these amendments they apply to all industries in the state, including agriculture, tech, aerospace and the many small and mid-sized businesses that fuel our economy.
Some of the amendments include:
- Senate Bill No. 1300, the Sexual Harassment Omnibus Bill, which makes it easier for victims to file claims and harder for employers to settle harassment claims
- Senate Bill No. 826, which mandates a minimum number of women on corporate boards of directors
- Senate Bill No. 1343, which expands requirements for anti-harassment training and education. The remainder of this post focuses on this amendment and how it affects your business.
The New Requirement
Senate Bill No. 1343, which goes into effect on January 1, 2019, calls for mandatory employee training and education designed to prevent sexual harassment. It impacts virtually all California companies, so you’ll want to be aware of its requirements and timing.
As we understand it, the new law will require companies to provide:
- Two hours of sexual harassment prevention training to supervisory staff
- One hour of training to other employees including migrant and seasonal agricultural workers
The Department of Fair Employment and Housing is allowing some leeway on how you conduct the training. You can offer individual or group sessions as well as provide the full training in one session or spread it over several sessions. And the training can be combined with other training topics if you like.
Deadline to Complete the Training
You’ll be required to provide the one- or two-hour training sessions to your employees in 2019, and you have the full year in which to do so. But you might want to get it scheduled sooner rather than later so you can tick off that box on your list of HR requirements.
After the initial training, you must provide your employees with an additional hour of training once every two years.
What about employees hired after you conduct this initial training? If they are supervisors, the law requires you to provide training within six months of the date they are hired, promoted, or moved into a new role. If they are temporary or seasonal employees hired for fewer than six months, the law requires you to provide training within 30 days of their hire date, or within 100 hours worked, whichever comes first.
In addition to providing the sexual harassment prevention training, your company will be required to:
- Hang an updated poster on workplace discrimination in a “prominent and accessible” location(s)
- Hang a new poster defining transgender rights in the same location(s)
- Distribute an information sheet to employees as an enclosure with paychecks or via some similar method that ensures each employee receives the material.
Companies Impacted by the Change
If you employ five or more employees, you must comply with the new amendments to this law. Included in the five or more employees are any temporary, migrant or seasonal help you use, even if they are hired for less than six months at a time.
Previously, the state’s sexual harassment training requirement applied only to companies with 50 or more employees, and only to supervisory staff at those companies, so this is a major modification. Now, virtually all companies must provide this training except sole proprietors and true Mom ‘n’ Pop stores with only Mom and Pop on the payroll. The only exception is if your temporary employee is hired through a temporary staffing agency, it's the agency that is required to provide the training.
Support from the State
The Department of Fair Employment and Housing will develop the training courses and provide all the materials you need for both the one- and two-hour online training sessions.
The state will also produce the informational posters and information sheets on sexual harassment prevention mentioned above.
Training and informational materials will be available in multiple languages including English, Spanish, Simplified Chinese, Tagalog, Vietnamese, Korean and possibly others.
Training aside, we won’t know the full and complete impact of Senate Bill No. 1343 on California businesses until more information is released by the state.
It’s possible that companies’ options might change when faced with a sexual harassment claim. It’s also possible that adjustments to your Employment Practices Liability Insurance (EPLI), General Liability Insurance or Directors & Officers Insurance (D&O) will be required or recommended. Any of these three policy types could be called into play if your company finds itself defending a sexual harassment or related workplace claim.
At Leap/Carpenter/Kemps Insurance Agency, we’ll be watching closely to determine if and how these changes to state law impact our customers and reaching out to them with updates and recommendations when the time comes.
The threat of facing a sexual harassment claim is real. According to the Los Angeles Times, “Two out of five women in media have been harassed by a colleague, and more than one in five men in the industry have been harassed, according to the January survey of 3,213 employees in a variety of white-collar occupations.”
Regardless of which industry you operate in, sexual harassment cannot be ignored. First and foremost, workplace harassment is unacceptable behavior that puts victims’ careers and physical or mental wellbeing at risk. A hostile work environment also reflects poorly on the company, affects employee morale and can trigger very expensive claims against the company.
So watch your mail and email for updates from the Department of Fair Employment and Housing, and get your employee training scheduled as soon as the state makes the training materials available.
Disclaimer: The contents of this email do not constitute legal advice. They represent the author’s opinions and interpretation of recent changes to state law. For guidance on how this law affects your company, please consult an attorney.