The California Legislature has been busy creating new rights for employees and responsibilities for employers. As employers prepare for 2024, and update their policies and practices, there are a number of new laws to consider. Unless otherwise noted, all law discussed below will be effective as of January 1, 2024.
California Paid Sick Leave Increases to 40 Hours or 5 Days Annually
Senate Bill 616 (SB 616), signed into law on October 4, 2023, expands California’s Healthy Workplace Healthy Family Act by requiring employers to provide five (5) days or forty (40) hours of paid sick leave to employees.
Under the new law, employers may still opt for employees to accrue sick leave at one (1) hour of sick leave for every forty (40) hours worked or front load the mandated hours. For employers using an accrual method other than one (1) hour for every forty (40) hours of work, the new law requires that employees accrue least twenty-four (24) hours of paid sick leave by their 120th day of employment and forty (40) hours by their 200th day of employment.
Employers may no longer cap accrual of sick leave at forty (40) hours; instead, the minimum cap will now be forty-eight (48) hours or six (6) days.
Reproductive Loss Leave
Senate Bill 848 (SB 848), signed into law on October 10, 2023, provides a new type of leave for California employees for a reproductive loss event. Employees will now receive five (5) days of protected leave for a reproductive loss event, up to a maximum of twenty (20) days for multiple events within a 12-month period after being employed for thirty (30) consecutive days. A reproductive loss includes a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.
Employers may require employees to use their accrued but unused sick and vacation leave while on leave. If an employee has no sick or vacation time, the leave may be unpaid. Although the reproductive loss leave does not need to be taken on consecutive days, the leave must be completed within three months of the reproductive loss event.
California Lowers the Bar for Asserting Retaliation Claims
Senate Bill (SB 497), the Equal pay and Anti-Retaliation Act (the “Act”), signed into law on October 8, 2023, creates a rebuttable presumption of retaliation if adverse action is taken against an employee who engages in protected activity and is disciplined or discharged within 90 days thereafter. Notably, the Act does not create any new duties for employers.
Discrimination Against Off Duty Cannabis Use Prohibited
Assembly Bill (AB-2188), signed into law on September 18, 2022, amends Government Code section 12954 to make it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalize a person, for use of cannabis off the job or away from the workplace or for failing a drug screening test for non-psychoactive cannabis metabolites.
The new law does not change employers’ right to prohibit employees from possessing, being impaired by or using cannabis on the job.
Individuals working in the building and construction trades and positions requiring a federal government background investigation or security clearance in accordance with federal regulations are not protected by the law.
Other state or federal laws requiring applicants or employees to be tested for controlled substances as a condition of employment or testing required by law to receive federal funding, federal licensing-related benefits or with respect to requirements for entering into a federal contract are exempt from this law.
Workplace Violence Prevention Plans
Senate Bill 553 (SB 553) requires employers to implement extensive workplace violence prevention plans (“WVPP”) and deliver specific training to employees by July 1, 2024.
The law adds a new section to the Labor Code, section 6041.9, which requires every employer to establish, implement, and maintain an effective Injury Prevention Program. Injury Prevention Programs must include names or job titles of the persons responsible for implementing the plan; procedures to obtain the active involvement of employees and authorized employee representatives in developing and implementing the plan, and procedures for: (1) accepting and responding to reports of workplace violence; (2) prohibiting retaliation against an employee who makes such a report; (3) ensuring that supervisory and nonsupervisory employees comply with the plan; (4) communicating with employees regarding workplace violence matters; (5) responding to actual or potential workplace violence emergencies; (6) developing and providing training; (7) identifying and evaluating workplace violence hazards; (8) correcting workplace violence hazards; (8) posting information about incident response and investigation, and; (9) reviewing and revising procedures for effectiveness.
The law also requires employers to ensure that the plans must be in effect at all times, in all work areas, and to be easily available and accessible to all employees, union representatives, and the California Occupational Health and Safety Administration (CAL/OSHA).
Employers may be exempt from these requirements if: there are no more than nine (9) employees present in the workplace at any one time and the location is not accessible to the public; employees work remotely from a place of their choosing; or the employer is a health care facility, law enforcement, or correctional facility.
Minimum Wage Increases
Senate Bill 525 (SB 525), signed into law on October 13, 2023, establishes a state-wide minimum wage schedule for health care workers in California employed by covered healthcare facilities. A “covered health facility” includes all health care facilities except for those operated by the California Department of State Hospitals, tribal clinics and outpatient settings operated by federally recognized Indian tribes. The bill applies to “covered healthcare employees” which includes numerous positions such as nurses, medical residents, interns, fellows, support personnel such as housekeepers, janitors, groundkeepers, and clerical workers, but excludes outside salesperson and delivery or waste collectors not directly employed by the healthcare facility.
Beginning on June 1, 2024, minimum wage increases for covered health care workers ranging from $18 an hour to $23 an hour, depending on the type and size of the health care facility. Minimum wage will continue to increase annually until it reaches $25 an hour.
Fast Food Workers
Assembly Bill 1228 (AB 1228), signed into law on September 28, 2023, increases the minimum hourly wage for covered fast food workers to $20.00, effective April 1, 2024 and repeals the Fast-Food Accountability and Standards Recovery Act (FAST Act). The bill implements new regulations for the California food industry incorporating the terms of an agreement reached between labor representatives and fast-food companies. The bill applies to “National Fast-Food Chains” consisting of more than 60 establishments nationally that share a common brand and primarily engage in providing food and beverage for immediate consumption, but excludes bakeries or restaurants inside grocery stores.
This bill also creates the Fast-Food Council (the “Council”) within the Department of Industrial Relations. The Council may adjust hourly minimum wage annually beginning January 1, 2025 through January 1, 2029, and set limitations and procedures for adopting and reviewing fast food restaurant health, safety, and employment standards.
California Minimum Wage Increases to $16 an Hour
California’s minimum wage for non-exempt employees generally will increase from $15.50 to $16 an hour. The minimum wage increase will also require employees to pay exempt employees a minimum annual salary of no less than $66,560 to maintain their exemptions from overtime. (This salary threshold minimum of two times minimum wage for exempt employees increases with each state minimum wage increase based on the following formula: hourly wage X 2080 X 2.)
Wage Notice and Disclosure Requirements for Newly Hired Employees and Agricultural Workers
Assembly Bill 636 (AB 636), signed into law on October 8, 2023, amends Labor Code section 2810.5 requiring employers to provide employees with additional information at the time of hiring, beginning on March 15, 2024, as follows:
- Information about the existence of a federal or state emergency or disaster declaration applicable to the county or counties where the employee is to be employed, and that was issued within 30 days before the employee’s first day of employment, that may affect their health and safety during their employment.
- Information in Spanish and English, if requested by the employee, about agricultural employee rights under California law for employees holding a federal H2A agriculture visa.
- Information about the existence of a federal or state disaster declaration applicable to the country or counties in which the employee will be employed.
An updated notice template integrating the new requirements will be published by the Labor Commissioner by March 1, 2024.
H-2A employees are excluded from the definition of employee if they are covered by an agreement that provides for wages rates of not less than the federal H-2A program wage required to be paid during the contract period.
Hightened Requirements and Consequences for Companies with Improper Noncompete Agreements
Senate Bill 699 (SB 699), signed into law on September 1, 2023, adds section 16600.5 to the California Bus. & Prof. Code, which allows former, current and prospective employees to bring an action against employers for using noncompete agreements that violate Bus. & Prof. Code section 16600. Under section 16600, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” The new law will allow persons subjected to an illegal noncompete agreement to obtain injunctive relief, actual damages they incurred, and reasonable attorneys’ fees and costs. Until now, employees did not have a private right of action for violations of section 16600. Employers now must be extra diligent to ensure their employment agreements do not violate section 16600.
Similarly, Assembly Bill 1076 (AB 1076), adds into law California Bus. & Prof. Code section 16600.1, which requires employers to give written notices to current and former employees who are subject to agreements that violate section 16600. Employers must send written individualized notices to the last known addresses and email addresses of current and former employees who were employed after January 1, 2022 in order to inform them that their noncompete provisions or agreements are void. For more information please see our prior blog on these issues.
State Court Judges given Discretion to Deny Stay of Action Pending Appeal of Petition to Compel Arbitration
Senate Bill 365 (SB 365), signed on October 10, 2023, amends California Code of Civil Procedure section 1294, providing state court trial judges with discretion to move forward with litigation in court even while an appeal of the denial of a petition to compel arbitration is pending. Prior to SB 365, an appeal of a denial of a petition to compel arbitration stayed the matter in the trial court pending the outcome of that appeal. For more information please see our prior blog on these issues.
Recall Rights Become Permanent for Hospitality and Building Services Employees
In response to COVID-19 related layoffs of hospitality and building services employees, California enacted Labor Code section 2810.8, which requires certain hospitality and business services employers to make written job offers to employees laid off due to reasons related to the COVID-19 pandemic. The existing law was set to expire on December 31, 2024. Senate Bill 723 (SB 723) modifies section 2810.8 in two ways. First, it extends the sunset date of the statute by one year, to December 31, 2025. Second, it creates a presumption that any layoffs by hospitality or building services employers that occurred on or after March 4, 2020 were related to the pandemic.
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If you need assistance or have any questions about these new laws, including with respect to updating your policies and practices, please feel free to contact us.