by Teresa R. Tracy
As always, the new year also brings many new employment laws for California employers. Except as indicated below, they become effective January 1, 2023.
The following is a summary of state laws only. Employers need to remember that local jurisdictions frequently have higher requirements that must be complied with if employees work in that jurisdiction.
Wage and Hour
Effective January 1, 2023, California’s minimum wage will increase to $15.50 per hour, for all employers regardless of size. As the result,
- the minimum salary to qualify for the administrative, executive, and professional exemptions from the state’s overtime laws will increase to $64,480 for all sized employers; there will no longer be a lower threshold for small employers.
- the tool reimbursement exemption, where applicable, also increases.
The salary to qualify for the computer professional exemption will increase to $112,065.20 annually and $53.80 per hour.
Leaves of Absence
CFRA and paid sick leave for “designated persons” (AB 1041; Government Code 12945.2 and Labor Code 245.5) – California Family Rights Act (CFRA) leave (which applies to employers with at least five employees nationwide only one of which must be in California) or paid sick leave (which applies to all California employees regardless of the employer’s size) will be expanded to allow eligible employees to take a caregiver leave under the CFRA to care for a “designated person”. A “designated person” is defined as any individual related by blood or whose association with the employee is the equivalent of a family relationship. An employee can identify a person as a “designated person” at the time the employee requests CFRA leave. An employer can limit an employee to one designated person in a 12-month period. Separately, AB 1041 allows an employee to take paid sick leave to care for a “designated person” under the California Healthy Workplaces, Healthy Families Act of 2014.
Bereavement leave (AB 1949; Government Code 12945.7, 12945.21, 19859.3) – Up to now, employers had complete discretion about whether to offer bereavement leave and on what terms. This new law amends the CFRA and requires covered employers (i.e., an employer with at least five employees nationwide only one of which must be in California) to provide up to five days of unpaid bereavement leave for the death of a family member, including a spouse, child, parent, sibling, grandparent, grandchild, domestic partner or parent-in-law. To be eligible for this leave, the employee must have been employed for at least 30 days. The leave must be taken within three months of the family member’s death, and can be taken all at once or intermittently. Employers may require that employees take this leave pursuant to any existing bereavement leave policy. If the employer does not have an existing bereavement leave policy, the leave may be unpaid, although an employee can elect to use accrued vacation, personal leave, sick leave, or other compensatory time off to remain in paid status. This new bereavement leave obligation is separate and apart from the CFRA leave available to eligible employees for certain serious health conditions of themselves or specified family members.
COVID leave (AB 152; Government Code Article 9.1 of Chapter 1.6 Part 2 of Division 3 of Title 2 and Labor Code 248.6 and 248.7) – This extended supplemental paid sick leave through December 31, 2022. It expires as of that date unless renewed. The total maximum amount of COVID-19 supplemental paid sick leave a covered employee is entitled to is 80 hours for the period January 1, 2022 through December 31, 2022. After an employee tests positive for COVID-19, an employer may require that the employee submit to a diagnostic test on or after the first positive test, and, if that test is positive, employer can require a second diagnostic test within no less than 24 hours (at the cost of employer). Employers have no obligation to provide COVID-19 supplemental paid sick leave if an employee refuses to provide documentation of a positive test result for the employee or employee’s family member, or if the employee refuses to submit to diagnostic tests.
Pay Transparency (SB 1162; Labor Code 1197.5)
Current state law prohibits employers from asking applicants about their salary history and requires employers to provide applicants with pay scale information upon request. This new law adds to employers’ obligations and creates a new California Civil Rights Department (CRD) pay data reporting obligation.
- All employers are required to disclose to existing employees, upon request, a pay scale for their positions.
- Employers with 15 or more employees must now include a pay scale in all job postings.
- Employers with 100 or more employees must also comply with new pay data reporting requirements and submit those reports on an annual basis to the California Civil Rights Department (CRD), separate and apart from an employer’s filing of the EEO-1 report. This report, which is due annually on the second Tuesday in May, must include (a) separate pay data for employees hired through labor contractors (i.e., covering temporary staffing agencies) that discloses the “ownership names of all labor contractors used to supply employees”, and(b) the median and mean hourly rate for each combination of race, ethnicity, and sex for each job category for both traditional employees and those hired through labor contractors.
Employee Privacy and Personal Data (California Civil Code 1798.100-1798.199.100)
In the past, the California Consumer Privacy Act has not applied to employees. However, effective January 1, 2023, the new law requires a privacy notice be given to employees and job applicants at the time of collection of their personal information. This is a wide-ranging law that covered employers should study closely. The new law applies to employers that collect the personal information of any California consumer (including employees) and has, in the past 12 months, (a) had a least $25 million of annual gross revenue, (b) buys, sells, shares, or receives personal data or the personal information of 100,000 or more California residents, or (c) receives over half of its revenue from the sale of personal data of California residents. Employers that do not meet these criteria could still be subject to this law if they (a) own or control a business defined in the law, or (b) share common branding with a business and with whom the business shares (or receives) consumers’ personal information for the purpose of cross-context behaviroal advertising purposes. The law has heightened protections for “sensitive personal information,” which includes social security, driver’s license, passport, and financial account numbers and other highly private information. Consumers will now have the right to (a) limit a business’s ability to collect, use and share this information; (b) request that businesses correct inaccurate information about the consumer; (c) limit a business’s ability to collect and use geolocation data that has a level of precision within 1,850 feet; and (d) prohibit businesses from sharing data with others for the purposes of cross-context behavioral advertising. Employers must inform employees of their data retention policies and are not allowed to keep data longer than is “reasonably necessary.”
Enforcement does not begin until July 1, 2023. However, every covered employer should start now to identify the personal information that it collects about its employees, develop an employee and job applicant privacy notice, review contracts with service providers that receive and/or process employee personal information, and establish internal procedures to receive, analyze, and honor employee data requests.
Reproductive Health Decision Making (SB 523; Government Code 12920, 12921, 12926, 12940, 12993)
In yet another amendment to the Fair Employment and Housing Act (FEHA), “reproductive health decision making” is a new protected classification. This term includes, but is not limited to, a decision to use or access a particular drug, device, product, or medical service for reproductive health, e.g., contraceptives or an abortion. The law also prohibits employers from requiring an applicant or employee to disclose information relating to the person’s reproductive health decision making. It also expands required health plan coverage for contraceptives.
FEHA Right to Sue Notices (AB 2960; Government Code 12965)
Right-to-sue notice deadlines are now tolled during mandatory or voluntary dispute resolution proceedings.
Employer Liability for Reproductive Health-Related Actions (AB 2223; Health and Safety Code 12367)
This new law prohibits a person (to include employers) from being subject to civil or criminal liability based on their actions or omissions with respect to their pregnancy or actual, potential, or alleged pregnancy outcome or based on their actions to aide or assist a woman or pregnant person who is exercising their reproductive rights.
Hate Crimes (AB 2282; Penal Code 11411)
The definition of hate crimes in places of employment is expanded to include display of hate imagery.
No Adverse Actions during State of Emergency (SB 1044; Labor Code 1139)
Under this new law, an employer cannot take or threaten to take an adverse action against an employee for refusing to report to, or leaving, a workplace or worksite within the affected area because the employee has a reasonable belief that the workplace or worksite is unsafe due to an emergency condition. “Emergency condition” is defined to mean (a) a condition of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act, or (b) an order to evacuate a workplace, a worksite, a worker’s home, or the school a worker’s child due to a natural disaster or a criminal act. A health pandemic is specifically excluded from the definition of “emergency condition.” It also prohibits an employer from preventing an employee from accessing a mobile device during an emergency condition. Thus, employers would be wise to revisit any “no cellphone use” policies.
COVID-19 Notices (AB 2693, Labor Code 6409.6)
Existing law requires an employer to provide written notice of the potential exposure in the workplace within one business day to all employees who were at the worksite. This notification requirement was set to expire on January 2023.
This law extends the reporting requirement to January 1, 2024. It also gives employers another option for complying with these notification requirements: the employer may either post a notice (and on existing employee portals) to all employees with the required information or provide written notice directly to each employee with the required information.
COVID-19 Posters (AB 2068; Labor Code 6318)
Certain health and safety posters relating to COVID-19 are required to be posted in additional languages.
Workers’ Compensation and COVID-19 (AB 1751; Labor Code 3212.87)
The current rebuttable presumption that an employee’s illness resulting from COVID-19 was sustained in the course of employment for the purposes of workers’ compensation benefits is extended to January 1, 2024. It also expands the provisions of this section to applicable to firefighters and police officers to include active firefighting members of a fire department at the State Department of State Hospitals, the State Department of Developmental Services, the Military Department, and the Department of Veterans Affairs and to officers of a state hospital under the jurisdiction of the State Department of State Hospitals and the State Department of Developmental Services.
Employee Restrooms (AB 1632; Health and Safety Code 118700-118703)
This new law requires businesses that are open to the public that have restrooms for employees to allow individuals who have Crohn’s disease, ulcerative colitis, irritable bowel syndrome, or any other similar medical condition, to use those employee restrooms. The State Department of Public Health is directed to create a form to use in connection with these sections.
Limitations on Fleet Vehicle GPS Tracking (AB 984; Vehicle Code 4854)
There are new disclosure requirements regarding the use of GPS tracking location technology in fleet vehicles. If an employer uses digital license plates to monitor employees, the tracking must be “strictly necessary” to the employee’s duties and only done during work hours. the employer must provide detailed notice regarding issues such as how the data will be used, and the time and frequency of the monitoring, among many other things. In addition, the law now allows an employee to disable tracking during off hours. The penalties for non-compliance are $250 per employee for the initial violation. For subsequent violations, the penalties increase to $1,000 for employee per day.
New Council Created for Certain Fast Food Employers (AB 257; Labor Code 1470-1472)
This new law creates a Fast Food Council of ten civilian appointees (fast food employees, worker advocates, franchisors, franchisees, and government officials within the Department of Industrial Relations) with authority to create new industry-wide employment laws for wages, working hours, and other working condition related to the health and safety of fast food employees working for a Fast Food Restaurant that is part of Fast Food Chain. The new laws could address working conditions such as wages, health and safety, workplace security, leaves of absence, and protections against workplace discrimination and harassment. Fast Food Chain is defined as a set of restaurants consisting of at least 100 establishments nationally that share a common brand or are characterized by standardized options for décor, marketing, packaging, products, and services. Fast Food Restaurant is defined as any establishment in California that is part of a Fast Food Chain and that, in its regular business operations, primarily provides food or beverages (a) for immediate consumption either on or off the premises; (b) to customers who order or select items and pay before eating; (c) with items prepared in advance, including items that may be prepared in bulk and kept hot, or with items prepared or heated quickly; and (d) with limited or not table services (table service does not include orders placed by a customer on an electronic device).
Because covered employers include corporate fast food chains as well as independent restaurant owners whose locations are part of a franchised brand, a family-owned, one location business within a franchised restaurant chain will be subject the same standards regarding working conditions as a company that itself owns 100 or more restaurants. The impact of this new law depends on what the council enacts.
The new law also protects an employee who made or is believed to have made a complaint or disclosed information to someone in authority about alleged violations, or who institutes or causes to be instituted or participates in a proceeding relating to employee or public health or safety of any council or Local Fast Food Council proceeding, or who refuses to perform work in a fast food restaurant based on a reasonable belief that its practices or premises would violate applicable obligations.
Reproductive Health Notices (AB 2134; Insurance Code 10123.210)
Religious employers’ healthcare service plans and insurers that do not provide coverage for abortion and contraception will be required to provide insured employees with written information about free abortion and contraception benefits or services available through the California Reproductive Health Equity Program.
Farm Workers (AB 2183; Labor Code 1156.36)
The Agricultural Labor Relations Voting Choice Act now gives agricultural workers the option to vote by mail in union representation elections that were previously required to be held in person.
Cal-WARN Obligations of Call Center Employers (AB 1601; Labor Code 1409-1411)
This law requires covered call center employers to provide notice of a mass layoff, relocation, or termination.
Background Checks for Home Health Services (AB 1720; Health and Safety Code 1796.19-1796.25)
This law removes the requirement for specified individuals connected with home healthcare facilities to sign a declaration regarding prior criminal convictions.
Home Health Care License Criminal Record Clearance (SB 1093)
Applicants for home healthcare licenses are now allowed to request transfers of criminal record clearance online. The law also removes the requirement to submit government-issued identification when requesting such a transfer.
Hotel Employers’ Liability for Human Trafficking (AB 1788; Civil Code 52.65)
Hotel employers will now be liable for human trafficking penalties if a supervisory employee knew of or acted with reckless disregard of sex trafficking activity.
Public Employer-Employee Relations (SB 931; Government Code 3551.5)
An employee organization is now allowed to file a claim against a public employer before the public Employee Relations Board alleging a violation of the prohibition against the employer’s deterring or discouraging public employees or applicants from becoming or remaining members of an employee organization.
Background Checks Limited (SB 731; Penal Code 1203.425)
The state Penal Code is amended to seal the records of defendants convicted of most felonies on or after January 1, 2005, if they completed their sentence, probation, supervision, parole and any other terms of their conviction and are not convicted of a new felony for four years. This provision commences July 1, 2023.
Garnishments (SB 1477; Code of Civil Procedure 706.050)
This new law reduces the maximum amount of wages that may be subject to garnishment. The maximum amount of disposable earnings of a judgment debtor for any workweek that is subject to levy must not exceed the lesser of 20% of the individual’s disposable earnings for that week or 40% of the amount by which the individual’s disposable earnings for that week exceed 48 times the state minimum hourly wage. It also reduces the multipliers used to determine the maximum amount of earnings subject to levy for any pay period other than a weekly pay period. These provisions become operative on September 1, 2023.
Off-Duty Cannabis Use (AB 2188; Government Code 12954)
Up to now, an employer could take disciplinary or other steps if an employee tested positive for THC at work, even if the use was allegedly during off-duty time. FEHA will begin protecting the off-duty and away from the workplace use of cannabis effective January 1, 2024. When this law becomes effective, an employer will not be able to discriminate against an applicant or employee in hiring, termination, or any term or condition of employment based upon (a) the person’s use of cannabis off the job and away from the workplace, except for otherwise permissible pre-employment drug screenings; or (b) an employer-required drug screen test that has found the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.
The new law does not permit an employee to possess, be impaired, or use cannabis on the job, nor does it affect the rights or obligations of an employer to maintain a drug- and alcohol-free workplace. The new law contains an exception for employees and applicants in the building and construction trades, and those who are subject to mandatory federal background checks. The law also does not preempt state or federal laws that require applicants or employees to be tested for controlled substances as a condition employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.
Although this law does not take effect until January 1, 2024, employers can anticipate that employees will cite it as a defense now.
Paid Family Leave Rate Increase (SB 951; Unemployment Insurance Code 3301)
Beginning on January 1, 2025, workers who earn up to 70% of the state average quarterly wage will be eligible for a higher percentage of their regular wages under the California Paid Family Leave and State Disability Insurance Programs. As the result, more employees may take advantage of one or both of these programs independently or in conjunction with other job-protected leaves of absence.
Benefits under 401k, Retirement and Pension Plans (SB 1126; Government Code 100000 and 100032)
This law expands the definition of “eligible employer” under the CalSavers program to include those with one or more employees. By December 31, 2025, employers with one or more employees that do not offer a retirement savings program are required to implement a payroll deposit retirement savings arrangement.
This article is made available for educational purposes and to provide general information on current legal topics, not to provide specific legal advice. The publication of this article does not create any attorney-client relationship and should not be used as a substitute for competent legal advice from a licensed professional attorney.