Five Don'ts When Hiring Employees in California - Avoid A Lawsuit

Isn’t it true that nationwide employers can interview and hire employees for their California offices so long as they follow federal hiring laws?  In a nutshell, no way.  Hiring in California presents a host of nuanced, state-specific rules that often add up to “don’ts.” We list a few for you below.

Don’t Oversell

Question:  We really would like to hire this guy.  Is it okay to tell him what he wants to hear about the job?

Answer:  No, especially if he will be moving for the job.  California Labor Code § 970 prohibits employers from making knowingly false representations about the nature of the work, the length of time that the work will last, and the compensation, among other things.  Not only can an alleged misrepresentation serve as the basis for a civil lawsuit, it is also a misdemeanor punishable by a fine or imprisonment for up to 6 months, or both!

Don’t Forget to Exclude The “Puffer”

Question:  We can ask an applicant about criminal convictions, right?

Answer:  Yes, but make sure you do not ask questions about any arrests, detentions that did not result in conviction, or certain marijuana convictions that are over two years old.  If the marijuana inquiry prohibition is violated, an applicant can recover the greater of his or her actual damages or $200, plus attorneys’ fees and costs.  It is also a misdemeanor, punishable by a fine.

Don’t “Judge”

Question:  An applicant owns handguns and goes to the shooting range on weekends to practice.  These are valid reasons not hire him, right?

Answer:  No, if the conduct is lawful, and takes place off-premises and during nonworking hours.  Labor Code §§ 96(k) and 98.6 (c)(1) protect applicants from such discrimination.  If such discrimination occurs, the applicant will be entitled to employment, and reimbursement for lost wages and benefits caused by the acts of the prospective employer.

Don’t Take Solace in Your Arbitration Agreements

Question:  Our company requires new hires in all states where we do business, including those in California, to sign an arbitration agreement.  We won’t have to worry about lawsuits in California court, correct?

Answer:  Not necessarily.  The California Supreme Court held in Armendariz v. Foundation Psychcare Services that “unconscionable” arbitration agreements are unenforceable.  Unconscionability is defined very broadly and includes situations where an employee does not have a realistic opportunity to bargain about the terms of an arbitration agreement, or where the terms are harsh or one-sided.  Some thought the United States Supreme Court’s decision in AT&T Mobility LLC v. Concepcion would chip away at Armendariz in favor of enforcement of arbitration agreements, but most California courts have refused to part with the Armendarizholding. (See e.g., Compton v. Superior Court).

Don’t Forget The “Paper”

Question:  We follow federal law in the distributions to new employees at or near the time of hire.  We are good to go in California, right?

Answer:  No.  California has specific distribution requirements at or near the time of hire, including:

• California Labor Code § 2810.5 requires private California employers to providewritten notice to employees no later than their first day at work about information including, but not limited to, the rate of pay, basis of pay (e.g., hourly, salary, commission, etc.), allowances for items claimed as part of the minimum wage (e.g., tips, meals and lodging), the regular payday, employer’s name, address, and phone number, any “dba,” and information regarding the employer’s worker’s compensation insurance carrier. 
• Employers must submit a Report of New Employee(s) (DE 34) within 20 days of any new employee’s first day of work.  Employers must also provide new employees with, among other things, a Disability Insurance Provisions pamphlet (DE 2515) within five days of hire, a Paid Family Leave Insurance pamphlet (DE 2511) no later than any new employee’s first day of work, and a California tax withholding form (DE-4), which some employees must complete upon hire. 
• The California Department of Fair Employment and Housing requires employers to provide its Sexual Harassment pamphlet (DFEH 185) or an equivalent document to all new hires.

Workplace Solutions: Even if you have only a handful of employees in California, it is prudent to familiarize yourself with the California-specific requirements pertaining to hiring and new employees.  A review of  any employment applications, interview questions, and new hire packets or checklists are all steps to ensure California compliance.

By Lori O'Hara and Samantha Evans