Payroll Services
Published January 23rd, 2017 by

Legal Update for California Employers


In the new year, California employers will experience a number of changes to their legal landscape, and need to educate themselves on these laws in order to ensure full compliance for their business.


While the change in government that is happening on January 20th, many businesses and employers are already expecting big changes for 2017. However, fewer people realize that many changes have already gone, or will go shortly into effect. Nationwide changes include a newly designed I-9 form as well as minimum wage increases in 21 states. Additionally, OSHA regulations go into effect requiring the electronic submission of their relevant workplace injuries and illness forms. California has additional changes, including a new law requiring some California employers to offer an automatic retirement savings arrangement that sends payroll deductions to a state retirement program. One element of an agricultural overtime bill eliminates the exemption from the Labor Code requirement to provide one day’s rest in seven.

New I-9 form

The I-9 form, more formally known as the Employment Eligibility Verification Form, is one familiar to anybody who has legally worked in the US since 1986, when The Immigration Reform and Control Act (IRCA) came into effect. This form was intended to prevent an employer from hiring someone without first checking and verifying their identification and eligibility to work in the United States. The White House Office of Management and Budget (OMB) approved a revised I-9 form in late August 2016, and the new I-9 form will be published by November 22, 2016, expiring August 31, 2019.

The intention in changing the I-9 form, familiar to any person who has been legally employed in the US, is to make it clearer to understand and easier to complete. This increased ease of clarity and access includes making it easier for employees to complete the form electronically. While employees will still have to print and sign the document, useful navigation tools increase the ease of completing them (e.g., drop-down menus for some fields). The electronic form will also be able to “error check” some vital fields, like social security number, ensuring that the data entered for each field is valid for that field. Furthermore, the new electronic form is able to provide specific help to job applicants with embedded instructions for completing each field available by simply clicking on a “?” icon next to the field.

The previous I-9 form will be valid until January 21, 2017. After this date, all employers will be required to switch to the newest version of form. It is important for businesses to not miss this deadline, as fines for I-9 non-compliance can range from $375 to $3200 per form.

Minimum Wage Increases

With rising costs of living across the country, 21 states have responded by raising their minimum wages. Four of these states, Alaska, Florida, Missouri, and Ohio record the smallest change, raising their respective minimum wages by $0.05 an hour. Montana and South Dakota, on the other hand, chose to raise their minimum wages by twice that, with a $0.10 an hour boost.

Other states raised the minimum wage as part of a wider plan to increase minimum wage incrementally over time to a projected goal. California, on its way to a $15 per hour minimum wage in 2022, raised their minimum wage by $0.50, while Arizona, with the biggest overall boost, bumped their minimum wage by $1.95 on their way to the goal of $12 per hour in 2020. New York State’s 0.70$ wage hike is the first in a series of five increases that will lift the minimum wage to $12.50 per hour. Washington now holds the record for highest minimum wage in the states, boosting theirs from $9.47 to $11 per hour.

While most of these state increases were set to take place in January 2017, not all do. Consult your local state’s laws to determine when these increases go into effect.

OSHA’s Final Rule on Reporting Workplace Injuries and Illnesses.

OSHA’s Final Rule on reporting workplace injuries and illnesses take effect on January 1, 2017, when the element of the ruling requiring certain employers to begin submitting injury and illness data electronically. These include employers with 250 or more employees, as well as employers whose industry is considered high risk (e.g., industrial work, grocery stores, and agriculture). Affected employers will be required to submit their Form 300A, containing information for their 2016 injury and illness numbers by July, 2017.

One element of this new rule which has already gone into effect for every employer is newly stated anti-retaliation protections. This element of the new rule went into effect December 1, 2016, after multiple delays due to court injunctions and legal debate. The new rule clearly prohibits retaliation by an employer towards any employee for reporting a work-related illness or injury. This new rule sets up OSHA as the arbiter or any of these claims, and allows OSHA to act unilaterally against employers who have retaliated against workers, even without the affected worker’s consent. The status of this element of the rule is bound to develop in 2017, and employers should keep an eye out for further legal challenges to this rule.

For more information on Osha’s Final Rule on reporting workplace injuries and illnesses, please see NOVAtime’s article on the Final Rule here.

California Legal Changes: California Secure Choice Retirement Savings Program

Active January 1, 2017, the California Secure Choice Retirement Savings Program requires eligible employers to offer a payroll deposit retirement savings arrangement. Employees who work for an employer that does not offer another retirement savings account will have 3% of their wages automatically placed in a new retirement account, unless they voluntarily opt out of the program. This law is expected to create new retirement savings accounts for nearly 7 million workers who do not already have one.

Under this law, an eligible employer is any person or entity engaged in a business, industry, profession, trade, or other enterprise in the state (both for profit and not-for-profit) with five or more employees that satisfies the requirements to establish or participate in a payroll deposit retirement savings arrangement. One important note regarding this new law is that it will NOT affect Federal, state, county, or municipal governments, although most of these entities offer other retirement savings arrangements. Additionally, this law will prevent the state, or any employers from incurring legal liabilities associated with this program.

The money contributed will go into the California Secure Choice Retirement Savings Trust, which will invest in a diversified portfolio that focuses on long-term financial growth. Enrolled employees will be able to adjust their contribution levels at will, or choose to exit the program altogether.

California Legal Changes: Overtime Protections for Farmworkers

California State Assembly Bill 1066, signed September 12, 2016, removes a longstanding exception for overtime rules for the agricultural industry. Like most hourly workers in California, agricultural workers will receive time and a half for any hours past eight in one day or 40 hours for the week. They will receive double time for any hours worked in excess of 12 in one day.

Additionally, agricultural workers will no longer be compelled to work seven days a week during peak season. Instead, agricultural workers must be given the option to take at least one day off in a seven-day work week. This law becomes active on January 1, 2017.

Preparation is Key

For any employers that may be affected by these changes, the best way to prepare—as with any legal change—is to educate yourself on the requirements of the laws and take what steps you can to ensure compliance before the law goes into effect. By taking the simple steps of studying the law, determining what is required of the employer, and enacting these requirements, many headaches and potentially large sums of cash may be saved.



NOVAtime Technology, Inc.

NOVAtime is a forward thinking time and attendance / workforce management solution provider.

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