Skip to content

It looks like we may have content for your preferred language. Would you like to view this page in English?

California Labor Code Amendments and Cases of Note


Domestic Partner Benefits (AB 205) Extends benefits traditionally reserved for spouses of employees to registered domestic partners of employees effective January 2005. Also affords registered domestic partners leave benefits under the California Family Rights Act.

Health Care Benefits
(SB2) In a program that will be phased in over a period of 3 years beginning January of 2004, California employers will be required to provide health care coverage to workers, or to contribute to a state fund that will provide health benefits.

Life Insurance (AB226) Prohibits employers from taking out life insurance on their non-executive employees while naming the employer as a beneficiary under the policy.

Worker’s Compensation Reform
(AB 227 and SB 228) These laws focus on addressing sharply rising insurance premiums and concentrate on the type and extent of medical treatment available for work-related injuries. They are complicated bills that replace the existing Labor Code provisions related to vocational rehabilitation benefits, and replace it with a new "job displacement benefit" for workers with permanent disabilities and excuse the payment of that benefit under certain conditions.

Discrimination and Harassment

Legislation establishing Employer Liability for Sexual Harassment by Nonemployees (AB76) overrules the court of appeal decision in Salazar v. Diversified Paratransit exempting employers under state law from harassing conduct of clients, vendors and other third parties where the employer knew or should have know of the harassing conduct, and failed to take immediate and appropriate corrective action.

Transgender Discrimination (AB196) law expands the definition of "sex" in the California Fair Employment and Housing Act (FEHA) to include "gender" as defined in Penal Code § 422.76, which includes a person’s actual sex as well as perceptions about their sex, so as to afford protection against transgender discrimination

Employer Liability for Harassment by Supervisors The California Supreme Court in Department of Health Services v. Superior Court held that employers are strictly liable for harassment perpetrated by supervisors, but also held that employees cannot recover damages that they could have reasonably avoided.

Leave Laws

Crime Victims (SB 478) requires employers to permit employees who are victims of a violent felony, a serious felony or a felony involving theft or embezzlement to be absent from work to attend judicial proceedings related to the crime. This law also affords benefits to immediate family members of victims.


Identity Theft (SB 1386) requires any business to notify customers or employees whose personal information is stored on computer when their personal information has been "acquired by an unauthorized person." This identity theft law applies to social security numbers, driver’s license numbers and credit card account numbers.

Social Security Number Disclosure (AB 763) Prohibits any person, including employers, from sending any mailer which displays a customer or employee’s social security number without the envelope having been opened.

Other Labor Code Amendments

Additional Penalties for Labor Code Violations (AB 276) This Bill amends the Labor Code to increase penalties for more than 100 Labor Code violations, including wage payment and wage withholding provisions.

Attorneys’ Fees for Wages and Hour Claims
(AB 223) Employees whose claims filed with the California Labor Commissioner are later appealed and result in a smaller award than given by the Labor Commissioner are nonetheless entitled to recover their attorneys’ fees for making the claim. This legislation was enacted to overrule the court decision in Smith v. Rae-Venter Law Group.

Contractor Compliance
(SB 179) Amends the Labor Code to make employers responsible for their contractor’s violation of labor laws, even if the employer and contractor are not joint employers and creates a "rebuttable presumption" that a company did not violate the law where certain elements exist to show the employer attempted to insure the contractor’s compliance.

The Labor Code Private Attorneys General Act (SB796) (referred to as the "bounty hunter law") takes effect on January 4, 2004, and provides employees with the right to bring a civil action on behalf of him or herself and other affected employees for Labor Code violations that the employee reports to the Labor and Workforce Development Agency but which the agency does not prosecute.

Whistleblower Protection (SB 777) Although under current law an employer cannot prevent (or retaliate against) an employee from reporting violations of law to a government agency, this new law extends employee protections to include the reporting of a "rule" violation, and affords protection to those who refuse to participate in any activity that would violate state or federal statutes, rules or regulations and applies also to rights in connection with "former" employment. Additionally the law imposes a $10,000 per penalty fine and requires that employers prominently display a list of employee rights and responsibilities under the whistleblower laws, including a telephone number of the whistleblower hotline to the state Attorney General’s office.

This client alert is a publication of Loeb & Loeb and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.