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Bay Area Human Resources Services


SharedHR’s monthly bulletin keeps you up to date on the latest HR news.

Bay Area Human Resources Services

Sweeping Changes to Sexual Harassment and Corporate Laws in California

Several weeks ago, Governor Jerry Brown signed into law several bills which will have a dramatic impact on sexual harassment claims. While Brown vetoed three prominent bills involving sexual harassment, those he signed offer California employees the greatest protections from sexual harassment in the United States.

Confidentiality Agreements: Employers cannot use a confidentiality agreement to guard “factual information” about a claim of sexual harassment, sexual discrimination or retaliation for reporting sexual harassment or discrimination. However, the law still permits employers to require confidentiality of the amount of a settlement, as opposed to the underlying allegations of harassment. In coming years, keep your eyes open for expansion of this bill to confidentiality agreements dealing with other forms of discrimination of harassment, like race, age, religion, or sexual orientation.

Releases: Employers cannot force a current employee to either:

  • Release claims of discrimination, harassment, or retaliation in exchange for a raise, a bonus, or as a condition of continued employment; or
  • Enter into a non-disparagement agreement that would forbid an employee from disclosing information about such a claim.

The bill does not apply to departing employees who release such claims in exchange for severance.

Eased Burden Of Proof For Employees: The Legislature:

  • Made it much easier for employees to litigate sexual harassment cases, expressly stating that sexual harassment claims are “rarely appropriate” for summary judgment, thereby increasing the chance of a trial.
  • Reaffirmed a core principle of sexual harassment law: employees need not show that sexual harassment has tangibly affected their productivity, rather only that it has made their job more difficult to perform.
  • Rejected a nearly 10-year-old decision from Judge Alex Kozinski – himself forced to resign from the Ninth Circuit from sexual harassment allegations – in which he found that a single act of sexual assault was not severe enough to state a harassment claim.

Training: Sexual harassment training for supervisors is now required for employers with 5 or more employees, expanding the threshold from its previous mandate for employers with 50 or more employees.

Brown also vetoed several bills dealing with sexual harassment claims, the most notable of which would have prohibited agreements requiring arbitration of those claims. In vetoing the bill, Brown noted that it “plainly violates federal law.” He also vetoed a bill which would have expanded the statute of limitation for filing a charge of sexual harassment from one year to three years and another bill which would have required employers to keep records of harassment complaints for five years after an employee’s departure.

These bills, which take effect on January 1, 2019, offer the most sweeping protections on sexual harassment to employees in the country. With the growth of the #MeToo movement and the recent focus on sexual assault from the Kavanaugh hearings at the U.S. Senate Judiciary Committee, employers should expect to see an uptick in harassment-related activity.

Female Directors Now Required On Boards Of Publicly-Held Corporations
Brown also signed a bill requiring publicly-held corporations that are incorporated in California, or that have their principal executive offices here, to have at least one female director on their board by December 31, 2019. No later than December 31, 2021, such corporations must have at least one female director if their number of directors is four or fewer, at least two female directors if their number of directors is five, and at least three female directors if their number of directors is six or more.

The failure to timely file board member information with the California Secretary of State pursuant to regulations to be adopted by such agency will result in a fine of $100,000. In addition, a first violation in failing to meet the quotas will result in a fine of $100,000; each violation thereafter will result in a fine of $300,000.

This law is likely to face legal challenges, including constitutional claims that it violates the internal affairs doctrine arising from the U.S. Commerce Clause as well as the equal protection clauses in the U.S. and California constitutions. In a signing message, Governor Brown noted that there have been “numerous objections to this bill and serious legal concerns that have been raised” and indicated that he didn’t “minimize the potential flaws that indeed may prove fatal to its ultimate implementation.” However, he stated that “recent events in Washington, D.C.—and beyond—make it crystal clear that many are not getting the message.” He copied the U.S. Senate Judiciary Committee on his signing message.

Guest Contributor, Hirschfeld Kraemer LLP

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services

Why Companies Outsource Leaves With ABD

In the first two decades of its existence, the Family Medical and Leave Act (FMLA) was used over 100 million times.  FMLA now covers approximately 60% of employers.  But leave management today goes well beyond FMLA to include leave provided under the Americans with Disabilities Act, paid and unpaid state leaves, sick leaves, and more.  As complexity increases, more businesses are turning to outsourcing.  The Disability Management Employer Coalition (DMEC) found that 40% of companies with more than 1,000 employees and 27% of companies with more than 50 employees outsource leave administration.  Here are some reasons businesses are turning to partners like ABD SharedHR to deliver leave administration outsourcing.

Leave management aligned to company culture

As companies try to streamline people operations with technology and look to simplify day to day administration, leaves can remain a stubborn holdout of complexity.  The competitive talent market in the Bay Area has led many companies to enhance leave benefits by offering unlimited paid time off, fully paid parental leave for fathers and mothers, and more.  Companies with headquarters in California may want to mirror company leave benefits for employees throughout the United States, even if state and local regulations do not require them to.  These differences in company leave philosophy only increase the need for a clear, concise, up to date leave policy which explains the interaction of company benefits with federal, state, and local regulation.  ABD SharedHR can help you develop or refine a policy document, and then administer leaves consistent with your company policies beyond simple FMLA management.

Intermittent leaves

Without question the hardest leaves to administer are intermittent medical leaves.  It is critical for companies to offer support and sensitivity while also separating legitimate requests from those which are seeking to take advantage.  Employers are unclear on their own obligations and limitations around leave administration.  Well intentioned HR teams become hesitant to ask for clarification on medical facts, and will often move forward with unclear, incomplete, or even no information supporting an employee’s need for a leave.  ABD SharedHR’s leave administration service includes management of all FMLA certification paperwork by an experienced HR professional so that your obligations as the company administrator are met.  ABD SharedHR knows how to manage open ended leaves and can push back on vague certifications, will monitor leaves for consistency with what has been certified, and will ensure clear documentation is in place for the benefit of your company and your employees.

Managing return to work

Getting employees back to work and productive should be the overarching goal of your leave policy.  But the return to work process is one of the most sensitive pieces of leave administration.  Employees may be released back to work “with accommodations”, meaning changes to job duties, work environment, schedule, etc. that a medical professional has deemed necessary.  Employers are legally obligated to engage in reasonable accommodation discussions with returning employees, but they are not required to say yes to every request.  ABD SharedHR will conduct return to work discussions, accommodation negotiations, and help you understand your obligations and the best practices as an employer.  In some cases, return to work may not be an option.  Employees may become disabled long term or may have existing performance issues or misconduct which the company needs to resolve during or immediately after a leave.  Because ABD SharedHR consultants are fully trained HR professionals they will identify and work with you on all complex leaves, return to work discussions, and separations with leave involvement.  When needed, ABD SharedHR leadership – VP of Human Resource level staff – will step in and facilitate.

Megan Coen – Vice President, HR Technology Consulting

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services


SharedHR’s blog addresses important HR topics. We cover everything from compliance to workplace advice.

When is it Time to Leave a PEO?

Author: Saul Macias, MBA, PHR

When you were smaller, partnering with a professional employer organization (PEO) made sense. It shifted some tasks and liabilities off your shoulders and allowed you to afford to offer good health benefits to your employees. Most of all, outsourcing your human resources, benefits, and payroll gave you space to concentrate on growing your business.

Though co-employment had a role in the growth of your organization, many employers arrive at a point where it is appropriate to exit. Here are some key considerations as you decide whether to initiate that transition away from your PEO:

Benefits: Lots has changed in the world of benefits in the past couple of years. Offering benefits in-house would give you the autonomy to design, choose and manage your health and retirement benefits. The desire for greater flexibility in employee benefits can be a key driver to part ways from a PEO. (A lack of knowledge in this area, however, can often delay a PEO exit).

Service: As you grow, your business and your employees’ needs become more complex. In the midst of that complexity, you may find that your PEO lacks the expertise to drive and support your HR, benefits and payroll to meet your unique and evolving needs. Furthermore, a lack of onsite support or expertise to help you cover a multi-state or international expansion can be most challenging under a PEO model.

Cost /Scale: The average employer in a PEO has 15 employees. According to the Society of Human Resources Management (SHRM), the average HR professional supervises approximately 70 employees. Somewhere between 70 and 100 employees the economics may merit managing your benefits, payroll and HR in-house. But what will it take to build a team that can handle this role?

Co-employment: Under a PEO, one key area of managing your employees is done by a different company whose culture and identity could be very different from yours.

Once you have decided to exit, how do you make it happen?

PEO Transition:  Working with an experienced partner like ABD can help you analyze and manage the critical transition away from your PEO. Our team of multi-disciplined experts can help you plan, select the best technology platform, build the required work flows, and transition into your new program while keeping daily operations running smoothly. We can also help you hire an internal team or uncover new options that offer more flexibility than a PEO, but still allow you to outsource some or all of your human resources function. Contact us today to explore the possibilities.

Disclaimer: Some information contained herein has been abridged from numerous sources and may be protected by various copyright laws. Such information should not be construed as consulting or legal advice. Please contact our office for specific advice and/or referrals.

Bay Area Human Resources Services