Top 10 Laws and Regulations for 2019

Every year comes with new laws and regulations that affect employers.

It pays to stay on top of all the new requirements, so we are here to help you understand those that are most likely to affect your business. The following are the top 10 laws, regulations and trends that you need to know about going into 2019.

1 Sexual harassment training

Since 2005, California law has required employers having 50 or more employees to provide at least two hours of sexual harassment training to supervisors every two years. SB 1343 changes this by requiring employers with five or more employees to provide non-supervisory employees with at least one hour by Jan. 1, 2020.
In addition, this training must be held every two years. Employers with five or more workers must provide (or continue to provide) two hours of the biennial supervisory training, as well.

2 Data privacy

Companies that collect data on their customers online should start gearing up in 2019 for the Jan. 1, 2020 implementation of the California Consumer Privacy Act of 2018, which is the state’s version of the European Union’s General Data Protection Regulation.

The law gives consumers the following rights in relation to their personal information:

  • The right to know, through a general privacy policy and with more specifics available upon request, what personal information a business has collected about them, where it was sourced from, what it is being used for, whether it is being disclosed or sold, and to whom it is being disclosed or sold;
  • The right to “opt out” of allowing a business to sell their personal information to third parties;
  • The right to have a business delete their personal information; and
  • Not be discriminated against by opting out.

The law applies to businesses that:

  • Have annual gross revenues in excess of $25 million,
  • Annually buy, receive for their own commercial purposes, or sell or share for commercial purposes, the personal information of 50,000 or more consumers, households or devices, and/or
  • Derive 50% or more of their annual revenues from selling consumers’ personal information.

    3 Independent contractors

While this legal development happened in 2018, now is a good time to go over it. In May, the California Supreme Court handed down a decision that rewrites the state’s independent contractor law.

In its decision in Dynamex Operations West, Inc. vs. Superior Court, the court rejected a test that’s been used for more than a decade in favor of a more rigid three-factor approach, often called the “ABC” test.

Employers now must be able to answer ‘yes’ to all three parts of the ABC test if they want to classify workers as independent contractors:

  • The worker is free from the control and direction of the hirer in relation to the performance of the work, both under the contract and in fact;
  • The worker performs work that is outside the usual course of the hirer’s business; and
  • The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hirer.

The second prong of the ABC test is the sentence that really changes the game. Now, if you hire a worker to do anything that is central to your business’s offerings, you must classify them as an employee.

4 Electronic submission of Form 300A

In November 2018, Cal/OSHA issued an emergency regulation that requires California employers with more than 250 workers to submit Form 300A data covering calendar year 2017 by Dec. 31, 2018. The new regulation was designed to put California’s regulations in line with those of Federal OSHA.

Starting in 2019, affected employers will be required to submit their Form 300A data by March 2. For instance, the 2018 summary would have to be posted before March 2, 2019. The law applies to:

  • All employers with 250 or more employees, and
  • Employers with 20 to 249 employees in specified high-risk industries.

    5 Harassment non-disclosure

This law, which takes effect Jan. 1, 2019, bars California employers from entering into settlement agreements that prevent the disclosure of information regarding:

  • Acts of sexual assault;
  • Acts of sexual harassment;
  • Acts of workplace sexual harassment;
  • Acts of workplace sex discrimination;
  • The failure to prevent acts of workplace sexual harassment or sex discrimination; and
  • Retaliation against a person for reporting sexual harassment or sex discriminat

The big issue employers will need to watch out for, according to experts, is that the new law could actually keep the employer and employee from reaching resolutions for disputes.

We will cover the five other top laws and regulations in our next blog post. 

When the Customer Is Sexually Harassing One of Your Employees

Society has become increasingly aware of the problem of sexual harassment in the workplace. Several high-profile offenders have seen their careers harmed or ended.

Employers are beginning to realize the harm this behavior among employees can cause. However, the problem might not be the business’s workers; in many cases, it is the customers.

Harassment by customers may occur in any business, but it is especially prevalent in certain industries. In the hospitality sector, some customers – generally male, but not exclusively so – who have been drinking may lose their inhibitions and behave inappropriately toward waitresses, bartenders, casino dealers or housekeeping staff.

Female sales representatives in the financial services sector may be subjected to unwanted attention and language, particularly during client dinners where most of the diners are men. And nurses are regularly subjected to male patients exposing themselves or touching them improperly.

Often, employees are reluctant to report these incidents for fear of losing their jobs. But employers who do learn of these problems have at least a legal responsibility to address them. If a worker brings a complaint about a customer’s behavior to management or the human resources department, the employer should:

 

  • Listen to the employee and take them seriously.
  • Thank them for coming forward.
  • Let them know that the issue will be addressed with the customer.
  • Ask them to report any further incidents that may occur.
  • Do nothing to imply that they will be retaliated against.

 

Some employers, such as restaurants, have a no-questions-asked procedure whereby a server can report to a supervisor that a customer is making them feel uncomfortable and the supervisor will immediately assign someone else to that table.

In addition to nipping a problem in the bud, this policy tells employees that their complaints will be considered legitimate.

After learning of a situation that may potentially be sexual harassment, the employer should:

 

  • Investigate the incident, including discussions with any witnesses.
  • If the customer is from another business, refer the matter to an appropriate person at that company. This should be someone with the authority to take any necessary action.
  • If the customer is an individual, separate the employee and the customer.
  • If the customer persists, issue a warning.
  • As a last resort, ask the customer to leave the premises.

 

The legal implications

Employers cannot afford to ignore these problems. Equal Employment Opportunity Commission regulations hold an employer liable for harassment by non-employees over whom it has control, such as customers on the premises, if it knew, or should have known about the harassment and failed to take prompt and appropriate corrective action.

The EEOC levies penalties of up to six figures for sexual harassment.

In addition, victimized employees may sue their employers for tolerating hostile work environments. Settling these lawsuits can be costly.

If the employers do not carry employment practices liability insurance, settlement costs and attorney and court fees will be paid for out of pocket.

Lastly, the failure to protect employees from harassment can lower workplace morale. This will inevitably lead to increased staff turnover. The employer will lose valuable employees and be faced with the cost of hiring replacements.

Federal law gives employees the right to feel safe at work, free from mistreatment by co-workers, supervisors and non-employees. It is also good business practice to provide a place where people want to work.

Employers must be vigilant about possible mistreatment of staff by customers and vendors. Tolerating this behavior may save a customer in the short run, but it will cost the business dearly in the longer term.

A final thought: Sexual harassment is not the sole preserve of men harassing women. It is also an issue of women harassing men, men harassing men, or one female harassing another.

 

 

 

 

 

 

 

 

 

MeToo Movement to Spawn Wave of Sexual Harassment Lawsuits

After revelations of sexual misconduct by a number of high-power executives, media personalities and politicians last year spawned the #MeToo movement, defense lawyers are predicting a record number of sexual harassment lawsuits will be filed against employers in the coming year.

The #MeToo movement has emboldened women who have been sexually harassed, abused or worse by a work superior or co-worker to come out and tell their stories. Any employer whose workers were subjected to this kind of behavior is at risk of being sued, regardless of whether or not the employer knew about the incident.

The costs of sexual harassment lawsuits can debilitate, if not sink a small business, considering the high settlement costs, attorney fees – and even awards if the cases go to trial.

As an employer you should already have anti-harassment policies in place, including a safe way for an employee to report harassment without fear of losing their job. In the #MeToo era, you should revisit your policy and consider new training for all employees, supervisors and management. Companies must be ready to quickly address sexual harassment, assault and discrimination in the workplace as it is uncovered.

 

What’s happening

A movement that started out in very high-profile, public industries and in politics will soon spread into the hallways of everyday American businesses.

The #MeToo movement has exposed unacceptable predatory behavior in the workplace. It has also shown that there is no room for tolerance of sexual harassment.

There are different types of sexual harassment and as an employer you should be aware of the differences.

Title VII of the Civil Rights Act of 1964 is the federal law which prohibits employers from discriminating against employees on the basis of sex, race, color, national origin, or religion. Sexual harassment is a form of sex discrimination in violation of Title VII.

Sexual harassment can include one or more of the following:

  • Unwelcome sexual advances
  • Requests for sexual favors
  • Visual, verbal or physical conduct that is sexual in nature.

There are two main types of sexual harassment in the work environment:

  • Quid pro quo, when usually a superior will make sexual advances or requests as a condition of employment or promotion. This could include a manager threatening termination unless the employee performs sexual favors, or a manager promising a promotion in exchange for sex.
  • A fellow employee or superior that may engage in unwanted physical contact, making vulgar or obscene comments, making sexual requests – or in the worst case, rape.

Companies must address sexual harassment through anti-harassment policies and sexual harassment prevention training with the goal of ending harassment rather than just attempting to avoid litigation. The training should be continuous and engaging.

Employers must create and communicate sexual harassment policies and promptly investigate all sexual harassment claims thoroughly.

Businesses should also have a fair and confidential system in place for reporting sexual harassment without risk of retaliation. All complaints should be taken seriously and investigated thoroughly.

Punishments must only been meted out after the investigation, and the punishment should fit the infraction, including firing if need be.

 

The final backstop: Insurance

Employers need to protect themselves financially from liability, but also create a safe work environment. Employment practices liability insurance (EPLI) will cover many of the costs associated with a sexual harassment action by an employee, including:

  • Legal costs
  • Settlements
  • Jury awards

In addition, in order to provide a legal defense and pay damages, some EPLI policies may include resources to help business owners create policies and procedures, training and awareness campaigns that may reduce the potential for future claims.

EPLI policies actually go further than just sexual harassment and discrimination. They also cover similar expenses associated with lawsuits alleging:

  • Discrimination
  • Wrongful termination
  • Breach of employment contract
  • Emotional distress or mental anguish
  • Invasion of privacy