This past year saw many new laws come into effect, passed by the California legislature, or signed into law by the Governor. Understanding changes in the law is vital to keeping your business in compliance and avoiding penalties, both civil and criminal.
AB 622 came into effect on January 1, 2016, and is now codified in California Labor Code 2814. This law was passed in an effort to prevent discrimination against those who are not permitted to work under federal law, as is the case for undocumented immigrants. Pursuant to Labor Code 2814, an employer may not use the E-Verify system to check whether an employee is authorized to work before making an offer an employment, unless such a check is required by federal law. The employer is still permitted to use the system to check the employment status of employees already employed by the employer.
Another new law is AB 2883, which will go into effect on January 1, 2017. This law creates a large change for small businesses and closely held corporations. The law currently in place states that although employers must carry workers’ compensation insurance for all employees, “employee” did not include offers or directors of private corporations where those officers were the sole shareholders, or all working members of a partnership or a limited liability company. The new law, however, revises these exemptions. As of January 1, 2017, the exemption for officers or members of the board of directors only applies if the member owns at least 15% of the corporation’s stock, or in the case of the general member of a partnership or managing member of an LLC, that the person elects to be excluded by executing a document affirming that he is a qualifying office, director, general partner, or managing member. This document is signed under the penalty of perjury.
Next, SB 623 modifies that benefits can be received under the Uninsured Employers Benefits Trust Fund and the Subsequent Injuries Benefits Trust fund. California law states that immigration status shall not have an impact on an injured workers’ ability to file for workers’ compensation. Under this new law, immigration status also will not act as a bar to applying for benefits under the UEBTF or the SIBTF.
Finally, under SB 560, the Contractors State License Board may now inspect certain job sites. This law allows the Board to conduct investigations and enforcement of licensees to make sure that they are carrying valid and current workers’ compensation insurance. The Board must also provide information regarding licensees to the Employment Development Department.
It is of central importance that your business conforms to the changing landscape of the law. Call me today at (714) 516-8188 for an appointment to discuss your business’s compliance with California Labor Code.