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Bay Area Human Resources Services

Bulletin

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

Bay Area Human Resources Services

Past Salary Questions Will Be Off-Limits to California Employers

In October, Governor Brown signed A.B. 168 which restricts employers’ use of salary history information as a factor in determining whether to offer an applicant employment and/or what salary to offer. The law also requires employers to provide applicants the “salary range” for a position upon request. After January 2018, an employer may consider salary history only if the applicant voluntarily provides such information.

A.B. 168 will become effective on January 1, 2018 and adds California to a growing list of states (Delaware, Massachusetts, and Oregon) which have passed similar laws. In addition to A.B. 168, San Francisco’s Mayor Ed Lee signed an ordinance (which will go into effect July 1, 2018) called “Parity in Pay Ordinance” which will prohibit employers in the City from asking job applicants about their salary history.  A.B. 168 and “Parity in Pay Ordinance” are very similar in nature, in addition, with “Parity in Pay Ordinance” an employer is not able to release the salary history of any current or former employee to the person’s employer or prospective employer without written authorization from the current or former employee.

The intent of these new pieces of legislation is to help eliminate the wage disparity between men and women. According to the Bureau of Labor Statistics, last year women who were employed full-time in California made an average of 88 cents to every dollar made by a man. In previous years, Governor Brown signed into law SB 358 to strengthen California’s Equal Pay Act and A.B. 1676, which provides that salary history cannot, by itself, be used to justify pay inequities. These new laws are intended to strengthen existing regulations.

Significance

To comply with California’s regulations, we recommend the following steps:

  • employers should make sure job descriptions and job titles are up to date and support the current direction of the organization.
  • employers should conduct compensation studies to compare positions and rates of pay between genders and look for possible issues.
  • salary ranges – if you do not have them – you should take steps to develop them based on this new law.
  • employers, particularly those with diverse divisions should consider a point factor study to objectively relate pay rates for different jobs.

For additional guidance and/or resources, please contact ABD SharedHR.

Candace Emmer, MA – HR Consultant

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

California Will “ban the Box” in the New Year

On October 14, 2017, Governor Jerry Brown signed Assembly Bill 1008 which amends the Fair Employment and Housing Act (FEHA) to add new language prohibiting employers from considering conviction history until an applicant has received a conditional offer of employment. This latest development is part of an ongoing movement in employment law that has been gaining popularity around the country in recent years and is commonly called “Ban the Box”. This is in reference to a check box often used on employment applications indicating whether the applicant has a criminal conviction history.

Attorney Michelle Natividad Rodriguez of the National Employment Law Project states “Removing questions about conviction history from job applications is a simple policy change that eases hiring barriers and creates a fair chance to compete for jobs… this change allows employers to judge applicants on their qualifications first, without stigma of a record.”

By January 1, 2018, California employers will need to review employment application process to remove from a job application or online application system any question about conviction history. Employers must ensure they don’t inquire into or consider an applicant’s conviction history before extending a conditional offer of employment.  All parties in the recruiting and interviewing process should be made aware of this change.  There are a few exceptions to this new aspect of the law, including:

  • employers with fewer than 5 employees
  • positions required by law to check conviction history
  • positions with criminal justice agencies
  • Farm Labor Contractors

ABD SharedHR finds that most of our clients use a vendor to conduct a post-offer background check that includes a criminal history search, and that the job offer is made contingent upon acceptable outcomes of that process.  A good background check vendor will ensure the correct process based on your jurisdiction and help meet other requirements such as notifications, permissions and offering the applicant a copy of the report when complete.

In the event that a candidate’s background check turns up a conviction, there are specific steps required by the new law if the employer feels that an adverse action, such as rescinding the offer, is warranted.  The employer must assess whether the applicant’s conviction history has a direct and adverse relationship with the specified duties of the job that justify denying the applicant the position.  Employers faced with this situation should consider factors such as the nature of the criminal offense, the time that has passed since the issue, and how those relate to the job being sought.

After the above assessment, if the employer still intends to rescind the offer and disqualify the applicant from the job, the employer must follow the steps required by the Fair Credit Reporting Act (FRCA), including a preliminary notification to the applicant that includes:

  • the notice “A Summary of Your Rights under the Fair Credit Reporting Act”
  • identifying in writing the conviction that caused the concern
  • a copy of the conviction history report
  • notification to the candidate of the right to respond to the notice before the employer makes a final decision, allowing at least 5 days
  • notification that the candidate may include evidence challenging the accuracy of the conviction history and/or evidence of any mitigating circumstances or rehabilitation

If the applicant responds by the deadline that the accuracy of the criminal history is in dispute, then another 5 days must be provided for more evidence of this to be submitted to the employer by the applicant.

Once these steps have been followed, an employer would need to consider all information revealed by the process before making a final decision.  If it is determined that the job offer will indeed be rescinded due to the results of the criminal background check, the employer must provide the applicant with a written notification of this decision, plus any further procedure the employer has to request reconsideration and the right to file a complaint with the Department of Fair Employment and Housing (DFEH).

Significance

Employers should take steps to remove pre-offer criminal history inquiries from application forms, process and online employment application systems.  Although this inquiry is still allowed in many states, we expect the “ban the box” or “fair chance” movement to gain ground.  When a background check reveals something that causes a potential employer to rethink an offer, carefully review and follow the steps required by this new law.  ABD SharedHR can review new hire documents and help set up compliant work flows.

Amy Kelemen, SPHR – Director of Professional Services, Senior HR Consultant

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

Blog

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 – Vice President of HR Services

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