As California employers prepare to enter 2024, they should be aware of the many new employment laws that will go into effect in the new year. Below are summaries of some of the most significant updates to California employment law.
Increase to Paid Sick Leave
Under California’s existing Paid Sick Leave law, employers were required to provide employees at least 3 days (or 24 hours) of Paid Sick Leave per year (accrued at 1 hour for every 30 hours worked). Starting on January 1, 2024, pursuant to SB 616, employers must now provide at least 5 days (or 40 hours) of Paid Sick Leave every year. Employees must continue to accrue at least 1 hour of Paid Sick Leave for every 30 hours worked so that employees have no less than 24 hours of accrued sick leave by the 120th calendar day of employment or each calendar year, or in each 12-year period. This requirement has been updated so that an employee has no less than forty (40) hours of accrued sick leave by the 200th calendar day of employment or each calendar year, or in each 12-month period. Employers may still satisfy California’s paid sick leave requirements by front-loading employees’ paid sick leave balances provided, however, that such front-loading meets the aforementioned accrual requirements.
Employers may still apply a limit on the amount of Paid Sick Leave an employee may use in a year, but the minimum limit that an employer can apply is increased to 40 hours per year. Additionally, the minimum accrual cap that an employer can apply to an employee’s Paid Sick Leave accrual is 10 days (or 80 hours). As a result of these updates, employers should review their sick leave and PTO policies to ensure that they meet California’s new requirements.
Reproductive Loss Leave
Under SB 848, California employers with at least 5 employees must provide at least 5 days of Reproductive Loss Leave to an employee that has suffered a “reproductive loss event,” which is defined as “the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.” To be eligible for this leave, employees must have worked at least thirty (30) days prior to the first day of leave, and, with some exceptions, the leave must be completed within three months of the Reproductive Loss Event. Reproductive Loss Leave may be nonconsecutive. If an employee experiences more than one reproductive loss event within a 12-month period, the employer shall not be obligated to grant more than 20 days of Reproductive Loss Leave within such 12-month period.
Leave under this new statute is unpaid unless the employer has an existing policy requiring paid leave. Also, employees must be allowed to choose to use any accrued and available paid sick leave or other paid time off for Reproductive Loss Leave.
Enhancements to Prohibition Against Retaliation for Actions under Equal Pay Laws
California Labor Code Section 1197.5 sets forth a substantial portion of California’s equal pay law, which prohibits employers from implementing pay discrepancies based on sex, race, or ethnicity. The statute sets forth the circumstances under which a pay discrepancy for substantially similar work may be acceptable and establishes a mechanism for how employees can recover for an employer’s violation of the statute. The statute also prohibits employers from restricting employees from disclosing wages and prohibits employers from retaliating against an employee for such employee’s participation or assistance in the statute’s enforcement.
SB 497 increases employee protections against retaliation by creating a rebuttable presumption against an employer if an employee alleges that the employer violated the statute within 90 days of such employee’s participation in an activity that is protected under Section 1197.5. As a result, in the event that an employer is in a position where it must take an employment action against such an employee, who has participated in such a protected activity within the last 90 days, such employer should ensure that they have adequate documentation to rebut the presumption that will be established against the employer if the employee brings a claim of retaliation.
Additional Measures Against Non-competition Provisions
Whereas non-competition and non-solicitation provisions have been void in California for a long while, the state has taken additional measures against such provisions in SB 699 and AB 1076. Starting on January 1, 2024, it will be a civil violation for a California employer to enter into or enforce such a provision. This rule applies even if the employer is entering into the provision with an employee who is located outside of California. As a result of this rule, California employers should review and update all their agreements (specifically, PIIAs) to remove any non-competition or non-solicitation language. More information about these new requirements can be found here.
Employers should note that this new rule applies retroactively to pre-existing agreements. If an employer has previously entered into non-competition or non-solicitation provisions with employees, they will need to send a notice to all such current and former employees who were employed after January 1, 2022, which notice states that the prohibited provisions are now void. These notices should be sent by February 14, 2024.
Workplace Violence Prevention Program
Starting on July 1, 2024, employers are required to have a workplace violence prevention plan that meets the requirements outlined in SB 553. The plan may be part of an injury and illness prevention plan or it can be in a separate document.
Off-duty Cannabis Use and Drug Test Results
Starting on January 1, 2024, under AB 2188, employers may no longer (i) take action against an employee for off-duty cannabis use, nor (ii) take action against an employee as a result of an employee’s positive test for non-psychoactive cannabis metabolites. There are certain exceptions for specific classifications of employees such as employees in the building and construction trades and employees hired for positions that require a federal government background investigation or security clearance. Additionally, employers may continue to have drug-free workplaces and prohibit employees from being impaired by or otherwise using cannabis on the job.
Additionally, SB 700 prohibits employers from making pre-employment inquiries related to prior cannabis use and using criminal history information related to cannabis use against an applicant.
Industry-specific Updates
Increased Minimum Wage for Health Care Workers
Starting on June 1, 2024, employers that meet the definition of a “covered healthcare facility” have updated minimum wage requirements for their covered healthcare employees. The minimum wage for such employees is set based on the type and size of the covered health facility, as established in SB 525. The new minimum wage standards will increase annually on June 1 of each subsequent year, under the terms of the new statute.
Fast Food Minimum Wage Increase
Under AB 1228, starting on April 1, 2024, fast food restaurant employees must earn a minimum wage of at least $20 per hour, which minimum wage may be increased annually by the Fast Food Council.
If you have any questions about these new updates, please contact your Kunzler, Bean & Adamson attorneys.
Increase to Paid Sick Leave
Under California’s existing Paid Sick Leave law, employers were required to provide employees at least 3 days (or 24 hours) of Paid Sick Leave per year (accrued at 1 hour for every 30 hours worked). Starting on January 1, 2024, pursuant to SB 616, employers must now provide at least 5 days (or 40 hours) of Paid Sick Leave every year. Employees must continue to accrue at least 1 hour of Paid Sick Leave for every 30 hours worked so that employees have no less than 24 hours of accrued sick leave by the 120th calendar day of employment or each calendar year, or in each 12-year period. This requirement has been updated so that an employee has no less than forty (40) hours of accrued sick leave by the 200th calendar day of employment or each calendar year, or in each 12-month period. Employers may still satisfy California’s paid sick leave requirements by front-loading employees’ paid sick leave balances provided, however, that such front-loading meets the aforementioned accrual requirements.
Employers may still apply a limit on the amount of Paid Sick Leave an employee may use in a year, but the minimum limit that an employer can apply is increased to 40 hours per year. Additionally, the minimum accrual cap that an employer can apply to an employee’s Paid Sick Leave accrual is 10 days (or 80 hours). As a result of these updates, employers should review their sick leave and PTO policies to ensure that they meet California’s new requirements.
Reproductive Loss Leave
Under SB 848, California employers with at least 5 employees must provide at least 5 days of Reproductive Loss Leave to an employee that has suffered a “reproductive loss event,” which is defined as “the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.” To be eligible for this leave, employees must have worked at least thirty (30) days prior to the first day of leave, and, with some exceptions, the leave must be completed within three months of the Reproductive Loss Event. Reproductive Loss Leave may be nonconsecutive. If an employee experiences more than one reproductive loss event within a 12-month period, the employer shall not be obligated to grant more than 20 days of Reproductive Loss Leave within such 12-month period.
Leave under this new statute is unpaid unless the employer has an existing policy requiring paid leave. Also, employees must be allowed to choose to use any accrued and available paid sick leave or other paid time off for Reproductive Loss Leave.
Enhancements to Prohibition Against Retaliation for Actions under Equal Pay Laws
California Labor Code Section 1197.5 sets forth a substantial portion of California’s equal pay law, which prohibits employers from implementing pay discrepancies based on sex, race, or ethnicity. The statute sets forth the circumstances under which a pay discrepancy for substantially similar work may be acceptable and establishes a mechanism for how employees can recover for an employer’s violation of the statute. The statute also prohibits employers from restricting employees from disclosing wages and prohibits employers from retaliating against an employee for such employee’s participation or assistance in the statute’s enforcement.
SB 497 increases employee protections against retaliation by creating a rebuttable presumption against an employer if an employee alleges that the employer violated the statute within 90 days of such employee’s participation in an activity that is protected under Section 1197.5. As a result, in the event that an employer is in a position where it must take an employment action against such an employee, who has participated in such a protected activity within the last 90 days, such employer should ensure that they have adequate documentation to rebut the presumption that will be established against the employer if the employee brings a claim of retaliation.
Additional Measures Against Non-competition Provisions
Whereas non-competition and non-solicitation provisions have been void in California for a long while, the state has taken additional measures against such provisions in SB 699 and AB 1076. Starting on January 1, 2024, it will be a civil violation for a California employer to enter into or enforce such a provision. This rule applies even if the employer is entering into the provision with an employee who is located outside of California. As a result of this rule, California employers should review and update all their agreements (specifically, PIIAs) to remove any non-competition or non-solicitation language. More information about these new requirements can be found here.
Employers should note that this new rule applies retroactively to pre-existing agreements. If an employer has previously entered into non-competition or non-solicitation provisions with employees, they will need to send a notice to all such current and former employees who were employed after January 1, 2022, which notice states that the prohibited provisions are now void. These notices should be sent by February 14, 2024.
Workplace Violence Prevention Program
Starting on July 1, 2024, employers are required to have a workplace violence prevention plan that meets the requirements outlined in SB 553. The plan may be part of an injury and illness prevention plan or it can be in a separate document.
Off-duty Cannabis Use and Drug Test Results
Starting on January 1, 2024, under AB 2188, employers may no longer (i) take action against an employee for off-duty cannabis use, nor (ii) take action against an employee as a result of an employee’s positive test for non-psychoactive cannabis metabolites. There are certain exceptions for specific classifications of employees such as employees in the building and construction trades and employees hired for positions that require a federal government background investigation or security clearance. Additionally, employers may continue to have drug-free workplaces and prohibit employees from being impaired by or otherwise using cannabis on the job.
Additionally, SB 700 prohibits employers from making pre-employment inquiries related to prior cannabis use and using criminal history information related to cannabis use against an applicant.
Industry-specific Updates
Increased Minimum Wage for Health Care Workers
Starting on June 1, 2024, employers that meet the definition of a “covered healthcare facility” have updated minimum wage requirements for their covered healthcare employees. The minimum wage for such employees is set based on the type and size of the covered health facility, as established in SB 525. The new minimum wage standards will increase annually on June 1 of each subsequent year, under the terms of the new statute.
Fast Food Minimum Wage Increase
Under AB 1228, starting on April 1, 2024, fast food restaurant employees must earn a minimum wage of at least $20 per hour, which minimum wage may be increased annually by the Fast Food Council.
If you have any questions about these new updates, please contact your Kunzler, Bean & Adamson attorneys.
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