Legislative Update: Employee conduct further protected with SB 497

Last Updated 10/25/2023

As California Governor Gavin Newsom wraps up his typical signature spree this time of year, we wanted to tell you about additional legislation in the employment category. Senate Bill 497 was enacted to amend sections of the Labor Code relating to protected employee conduct.

Here are the bill’s major provisions:

  • Establishes a rebuttable presumption in favor of an employee's retaliation claim if an employer engages in any disciplinary behavior, as specified, within 90 days of an employee engaging in specified protected activity.
  • Provides that in addition to other remedies available, an employer is liable for a civil penalty not exceeding $10,000 per employee for each violation of, among other things, specified whistleblower protections.
  • Requires the Labor Commissioner (LC), in assessing penalties for violations of specified whistleblower, political, and civil rights protections, to consider the nature and seriousness of the violation based on the evidence obtained during the course of the investigation. Requires the LC’s consideration of the nature and seriousness of the violation to include, but not be limited to: a) The type of violation; b) The economic or mental harm suffered; and c) The chilling effect on the exercise of employment rights in the workplace.
  • Establishes a rebuttable presumption in favor of an employee's retaliation claim related to prohibited discriminatory pay practices based on sex, as specified in the Equal Pay Act, if an employer engages in certain conduct within 90 days of the employee’s protected activity.

The rationale for introducing the measure was provided by Senator Smallwood-Cuevas as follows:

"In today's workplace, the fear of retaliation is still one of the main reasons workers are afraid to report labor violations. This is especially true for Black and Latinx workers who are more likely to experience retaliation. The Department of Industrial Relation’s most recent report of retaliation complaints filed with the Labor Commissioner’s Office found that just over 90% of retaliation claims were dismissed. In large part this is because when a complaint is filed with the Labor Commissioner’s office, the worker currently has the burden of proving that they were retaliated against because they were exercising their rights under the Labor Code. This burden of proof is extremely challenging for a worker who does not have the same level of access to information as the employer. [This bill] would shift the burden of proof from the worker to the employer if the worker is retaliated against within 90 days of engaging in any protected activity under the Labor Code. In this case, the employer would have to prove that any adverse action taken against the employee was because of a legitimate, non-retaliatory reason.”

So, what is the bottom line for employers? California law will presume retaliation by the employer against the employee if the employer acts adversely within 90 days of the employee’s protected activity, thus placing the onus on the employer to counter that presumption with appropriate evidence.  

If you have questions about any of the changes in employment law enacted this year, please contact Rosasco Law Group, APC.  We are here to make sense of the new and amended statutes, update employee handbooks and/or IIPPS for your office and provide any other needed support.

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