Rules Changes that May Affect You (2007)
Architects
AB 2914
Among other things, extends the sunset date of January 1, 2007 for architecture limited liability partnerships (LLP) and foreign LLPs to January 1, 2012.

Contractors
AB 881
Requires all roofing contractors to have workers' compensation insurance, whether or not having current employees.

All 6,000 licensees with an active Roofing (C-39) classification must have on file with the Contractor State License Board ("CSLB") by January 1, 2007, either a valid certification of Workers' Compensation Insurance or a valid Certification of Self Insurance. Failure to have one of the required certifications on file with the CSLB will result in: (1) the removal of the Roofing ( C-39) classification from a license with multiple classifications and/or (2) the suspension of a license where the sole classification is the Roofing (C-39) classification.

No exemptions to the Workers' Compensation Insurance requirement will be granted effective January 1, 2007.

Inactive roofing (C-39) contractors will not be subject to this requirement as long as their license remains inactive. In order to return to active status, the contractor must obtain Workers' Compensation Insurance and provide the required certification to the CSLB.

AB 881 also adds Section 11665 to the Insurance Code, requiring insurers who issue workers' compensation insurance to Roofing (C-39) contractors to provide an annual payroll audit for the contractor. The insurer may impose a surcharge on the policy holder for the audit. The new workers' compensation insurance requirements imposed by AB881 will remain in effect until January 1, 2011

AB 2073
Exempts the sale, installation, and servicing of a fire alarm, sold in conjunction with a security alarm system, from the home improvement contract requirement if the cost of making the fire alarm operable does not exceed $500.00, and other conditions are satisfied.

AB 2455
Increases the amount of money a person can seek in small claims court from $4,000 to $7,500 against a contractor who posts a cash deposit. This change brings the jurisdictional limit for these actions into conformity with 2005 legislation that increased other small claims court jurisdictional limits brought by natural persons to $7,500.

AB 2456
Prohibits the personnel of a contractor whose license is suspended due to outstanding liabilities, from serving as certain types of personnel for another licensee, and makes employment of such an individual, in certain capacities, cause for license suspension.

Amended California Business and Professions Code Section 714.5 defines final liabilities as taxes, additions to tax, penalties, interest on any fees that may be assessed by the Contractor's State License Board, the Department of Industrial Relations, the Employment Development Department, or the Franchise Tax Board. Until the debts covered by this section are satisfied, the qualifying person and any other person of record named on a license that has been suspended under this section shall be prohibited from serving in any capacity that is subject to licensure under this chapter, but shall remain suspended until the debt has been satisfied or until the personnel of record with the outstanding liabilities disassociates themselves from the renewable licensed entity.

AB 2457
Exempts from registration as a home improvement sales person a general partner on the license record of a partnership, and clarifies that certain individuals exempt from registering as home improvement sales persons, must be listed as personnel of record for the licensee responsible for soliciting, negotiating, or contracting for a service or improvement that is subject to regulation, at the time of the sales transaction.

AB 2457 amends California Business and Professions Code Section 7152.

AB 2658
Provides that in order for a contractor's license to be issued, reinstated, or reissued, satisfaction of monetary obligation or debt is required only to the extent that those obligations were not discharged, rather than adjudicated, in a bankruptcy proceeding and requires licensees to satisfy all their obligations to the extent that those obligations are not discharged under federal law.

AB 2658 amends California Business Professions Code Section 7713.5.

AB 2897
Prohibits a person of record of a revoked license, who meets specified criteria, from performing acts regulated by the Contractor State License Law, for a licensee, except as a bona fide non-supervising employee, and makes it a misdemeanor to violate this section, or for someone to knowingly hire an individual who meets the specified criteria, in any position other than a bona fide non-supervising employee.

The specified criteria are:

  1. The individual is a member, officer, director, owner, or partner of a license that was revoked.
  2. The individual had knowledge of or participated in any act or omission for which the license was revoked.
  3. The individual is not eligible for reinstatement of licensure under Section 7102.

In addition, an individual who: 1) furnished the qualifications for licensure, as set forth under Section 7068, and that license was revoked; and 2) the individual served in the capacity of a qualifying individual during the commission or omission of any of the acts that resulted in the revocation of the license (whether or not he or she had knowledge of or participated in those acts), shall not perform acts regulated by the Contractor's State License Law except as a bona fide non-supervisory employee. Violation of this section is a misdemeanor and is punishable by a fine of not less than $4,500, by imprisonment in the county jail for not less than ninety days and no more that one year or by both fine and imprisonment.

AB 2897 adds a new Section 7121.6 to the California Business and Professions Code.

Discrimination
SB 1441
Adds sexual orientation to existing classifications protected from discrimination by recipients of state funds and expands the definition of discrimination to include the perception that the victim is a member of a protected class.

While sexual orientation discrimination has long been prohibited in employment, SB 1441 adds "sexual orientation" to existing law that prohibits discrimination in the conduct or operation of state-funded programs and activities. The new law applies to any program operated or funded by the state, or that receives any financial assistance from the state, such as workers' compensation and paid family leave.

Health and Safety
AB 2067
Extends and clarifies the prohibition on smoking in the workplace. The California Smoke Free Workplace Act of 1994 prohibits smoking in public buildings and in all enclosed places of employment. This law specifically excluded covered parking lots, including common areas such as lobbies, lounges, waiting areas, elevators, stairwells and restrooms. It also defines "enclosed places of employment" to include the above listed common areas.

SB 1613
Establishes the California Wireless Telephone Act that as of July 1, 2008, limits the use of cell phones while driving to those having hands-free operation except for contacts with law enforcement and public safety agencies and certain commercial vehicles for whom the effective date is July 1, 2011.

Until July1, 2011, this prohibition does not apply to a person driving a motor truck or truck tractor, an agricultural vehicle, tow truck, or a commercial vehicle, when using a digital 2-way radio service that utilizes a wireless telephone that operates by depressing a push-to-talk feature as long as it does not require immediate proximity to the user's ear.

The law does not apply to a person driving a school bus or transit vehicle that is subject to certain existing wireless telephone usage restrictions, or to a person while driving a motor vehicle on private property.

AB 2977
This new law extends the safety requirements for construction of new pools (or remodeling of existing pools) to spas. Furthermore, this law changes what is acceptable for the safety features. This law also adds a new disclosure requirement to be given to consumers by contractors/builders when obtaining a permit to work on a pool or spa.

Prior law required certain safety features whenever a building permit is issued for construction of a new swimming pool at a private, single-family house. Such pools must have one of the following five features:

  1. A pool enclosure;
  2. A safety pool cover;
  3. Exit alarms on doors providing direct access to the pool;
  4. Self-closing, self-latching device with a release mechanism on doors providing direct access to the pool; or
  5. Other means of protection, if the degree of protection is equal or greater than any of the four previously specified devices.

Under the new law, the safety feature provision would be applicable to construction of a new pool or spa, or remodeling to a pool or spa (when permit is required). For spas, items (1) and (2) must have locking feature. Furthermore, two additional safety measures are allowed:

  1. Removable mesh fencing meeting standards of the American Society for Testing and Materials ("ASTM"); or
  2. Swimming pool alarms meeting ASTM standards.

In addition this law requires that the building inspectors ensure that the standards are met and that the safety feature is working correctly before approving the permit.

The consumer notice required under prior law that must be given when constructing new pools is now required for new spas, and on work on pools or spas requiring a permit. This law also updates the backup safety systems (e.g., suction outlets are to have anti-entrapment covers), and requires the Building and Standards Commission to update the building code for swimming pools and spas by January 1, 2010. This law amends California Health and Safety Code Sections 115922, 115924 and 11528.

Landlord/Tenant
AB 1169
This law re-establishes the sixty (60) day notice which is required by landlords to give to residential tenants on periodic leases (e.g month-to-month lease) when the tenants have been living in the property for at least one year. This law maintains the exception of a thirty (30) day notice for certain qualifying properties for sale.

Prior law required thirty (30) days notice for the landlord or the tenant to terminate a month-to-month tenancy. AB 1169 adds California Civil Code Section 1946.1 which requires that a landlord under a residential lease provide sixty (60) days notice to terminate any periodic lease, such as month-to-month rental, if all tenants and residents has been residing in the property for less than one year, then (30) days notice is sufficient.

Thirty (30) days notice may also be given when a residential property is being sold if all of the seven conditions set forth in Section 1946.1 are met.

Landscape Architects
AB 2256
Provides that anyone who offers to perform professional landscape architect services, as specified, must be licensed by the Landscape Architects Technical Committee.

Miscellaneous
AB 2618
Increases the jurisdictional limit in small claims court to $7,500 on certain issues which were left unchanged when general limits increased from $5,000 to $7,500. This law conforms the jurisdictional limit of a number of actions in small claims court, including some common interest development actions and landlord/tenant claims.

The areas where small claims court jurisdiction was previously limited to $5,000 and was increased to $7,500 are the following:

  1. specified acts of discrimination, including boycotting, blacklisting, violence, and a threat of violence;
  2. specified enforcement actions relating to common interest developments for declaratory, injunctive or writ relief in conjunction with monetary damages;
  3. specified actions in landlord-tenant law;
  4. a claim or counterclaim in a class action lawsuit;
  5. complaints to the PUC (Public Utilities Commission) through its website;
  6. complaints to the PUC against electrical, gas, water, heat or telephone companies; and
  7. specified juvenile law claims against a minor, or a minor's parent.

Real Estate
SB1052
Changes the deadline to appeal decisions or actions by an advisory agency relating to a tentative map on subdivisions that are conversions.

The Subdivision Map Act prior to being amended by SB 1052, authorized either the developer or any tenant in the property to appeal decisions or actions by an advisory agency relating to a tentative map on subdivisions that are conversions. Such appeals were required to be filed within ten days of any decision, and then be heard by either the appeals board or the legislative body ( if there is no appeals board) within thirty (30) days. Under the new law, if the legislative body does not have a regularly scheduled meeting within the thirty (30) days, then the appeal can be heard at the next regular meeting after the notice of the appeal, so long as such period does not exceed sixty (60) days. The new law restates that each decision mad by the legislative body under this section of the law must be supported by consistent findings of fact. This law amends California Government Code Section 66452.5.

AB 2962
Provides an alternative to the current California withholding tax requirement upon transfer of real property of paying three and one-third percent of the sale price on real estate on non-exempt transactions. Under this law, if withholding is required, the seller can opt to pay the top tier (under corporate or individual state tax law) on any recognized gain on the sale of the real property.

Before amended, the law required the payment of three and one-third percent as withholding on the transfers of real estate on properties which do not qualify for an exemption. Some of the more common exemptions, among others provided in the statute, are:

  1. Sale of a principal residence;
  2. Sale as part of a 1031 Exchange;
  3. Loss on the sale of property;
  4. Sales price of $100,000 or less; and
  5. A corporation with a permanent place of business in California.

Under the new law, if the transferor is not exempt from withholding at the time of the sale/transfer, the transferor can opt to withhold the maximum tax rate (under either individual tax rates or corporation tax rates) on the actual gain on the transferred property instead of the three and one-third percent. Such withholding would be done under penalty of perjury which would be subject to the penalty of the greater of (i) $500.00 or (ii) 10% of the amount required to be withheld, in addition to the withholding plus any interest, fees and other penalties. This law amends California Revenue & Taxation Code Sections 18662 and 18668.

Sexual Harassment
AB 2095
Limits mandated sexual harassment training to supervisors located in California.

Before the amendment the law required that employers train their "supervisory employees." Questions arose as to whether supervisors located outside of the State of California who supervise employees within the State of California were subject to the training requirements. AB 2095 clarifies that only supervisors located in California must receive the required training.

State Government
SB 1436
Requires state agencies to improve their communication regarding regulations and assistance with the business community, with an emphasis on small business.

Taxation
The IRS announced that beginning January 1, 2007, the standard mileage rate for the use of a car (including vans, pickups or panel trucks) will be:

  • 48.5 cents per mile for business miles driven
  • 20 cents per mile driven for medical or moving purposes; and
  • 14 cents per mile driven in service to a charitable organization

Wages
AB 1835
Increases California's minimum wage and exempt salary standards for all California employers. This law increases the California minimum wage to $7.50 per hour on January 1, 2007 and to $8 per hour on January 1, 2008.

AB 2095
Permits reporting of overtime hours on the same payroll date as the hours are paid when overtime is paid in the payroll period subsequent to the one in which it is earned.

AB 2095 amends Labor Code Section 204, which specifies the periods required for payment of wages. Prior to AB 2095 Labor Code Section 204 required that all wages earned by an employer are due and payable twice each calendar month on days designated by the employer but that, "wages earned in excess of the normal work period may be paid no later than the next consecutive pay day." This statute is inconsistent with Labor Code Section 226(a) which requires that an employer provides each employee at the time of each payment of wages an itemized statement showing the total hours worked by the employee during that pay period. The purpose of AB 2095 is to reconcile these two conflicting requirements. An employer is in compliance with Labor Code Section 226(a) if overtime hours worked in a current pay period, but paid in a next consecutive period, are itemized as corrections on the paystub for the next regular pay period. AB 2095 also requires that such correction include the inclusive dates of the pay period for which the employer is correcting its initial report of hours worked.

Wage Deduction
AB 2440
Imposes a penalty on an employer that assists an employee or contractor with child support obligations evade meeting those obligations, including failure to file reports upon hiring.

Workers' Compensation

AB 2068
Permits pre-designation of a medical group as the primary treating physician and extends the sunset date of the right of predesignation.



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