December 21, 2023 – California will certainly be one of the states to watch in 2024, as its active legislative session has ushered in a multitude of significant changes to the employment sphere. New guidelines are coming in the areas of leave, workplace conduct, restrictive covenants, arbitration, rebuttable presumptions of retaliation, and the prosecution of labor code violations. Several specific industries will see changes to minimum wages, recall rights, and the definition of a “laid-off employee.”
Leaves of Absence
Following amendment to the Healthy Workplaces, Healthy Families Act, effective January 1, 2024, California employers will now be required to provide five (5) days (or forty hours) of paid leave per year, as compared to the previous three (3) day (or twenty-four hour) requirement. Employers may still provide one hour of paid sick leave for every thirty (30) hours worked, or an alternative method of accrual, so long as the employee has no less than 24 hours accrued by the 120th calendar day of employment and no less than forty (40) hours accrued by the 200th calendar day of employment. Additionally, employers using the accrual method may not set an accrual or carryover cap of less than 10 days or 80 hours, whichever is greater.
See https://legiscan.com/CA/text/SB616/2023
Changes in the leave context will also afford employees leave for “reproductive loss events,” following expansion of the California Fair Employment and Housing Act’s protections. While it was previously unlawful for an employer to refuse an employee’s request to take up to five (5) days of bereavement leave upon a family member’s death, this safeguard now also specifically applies to eligible employees who have experienced a reproductive loss event. Such an event 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,” and the new law prohibits retaliation because an individual has exercised his or her right to reproductive loss leave or provided information or testimony concerning it. Any information provided to employers regarding reproductive loss leave must be kept confidential; disclosure except to internal personnel or counsel as necessary, or required by law, is prohibited.
Though reproductive loss leave may be unpaid, in the absence of an existing policy, other available types of leave, such as accrued and paid sick time, may be used. Reproductive loss leave generally must be taken within three (3) months of the qualifying event, and if an employee experiences more than one such event within a 12-month period, the employer is not required to grant leave time in excess of twenty (20) days during that timeframe.
See https://legiscan.com/CA/text/SB848/2023
Workplace Conduct
California employers will be required to adopt more stringent safeguards regarding violence in their workplaces. Currently, the California Occupational Safety and Health Act of 1973 requires employers to establish, implement, and maintain an effective injury prevention program. However, by July 1, 2024, nearly all employers must also have a workplace violence prevention plan (“WVVP”), structured like an Injury & Illness Prevention Program (“IIPP”), and they must maintain a violent incident log. All incidents of workplace violence must be reported, investigated, and recorded. In addition to initial training when the WVPP is first established, employers must provide annual training to employees.
See https://legiscan.com/CA/text/SB553/2023
As of January 1, 2024, it will generally be unlawful for an employer to discriminate against a person or otherwise penalize her/him because of cannabis use off the job and away from the workplace or based on the results of an employer-required drug screening test that finds non-psychoactive cannabis metabolites in the employee’s hair, blood, urine, or other bodily fluids. The new law does not preempt state or federal laws requiring applicants or employees to be tested for controlled substances, nor does it apply to applicants or employees hired for positions requiring certain federal government background investigation or security clearance. Notably, these restrictions do not apply to the building and construction trades, and employers can still refuse to hire an applicant or otherwise penalize her/him based on a scientifically valid pre-employment screening that does not test for non-psychoactive cannabis metabolites.
See https://legiscan.com/CA/text/SB700/2023
Restrictive Covenants
Non-compete agreements have long been treated as (mostly) unenforceable in California. However, moving forward, those that are void under California’s Business and Professions Code will be deemed unenforceable regardless of where and when the contract was signed, even if the employment was maintained outside of the state of California. An employer that executes a contract that is void under the new law, or attempts to enforce it, subjects itself to civil liability. Current, former, and prospective employees may bring a private action to enforce this chapter for injunctive relief or actual damages (or both), and prevailing employees are entitled to reasonable attorney’s fees and costs. Additionally, by February 14, 2024, employers must notify current and former employees who were employed after January 1, 2022, in writing that their noncompete agreement is void (unless it satisfies an exception to the Business and Professions Code chapter regarding Contracts in Restraint of Trade, such as for non-competes in connection with the sale of a business). Violating these provisions will constitute an act of unfair competition.
See https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB699#94CHP
and https://legiscan.com/CA/text/AB1076/2023
Arbitration
Though legal proceedings are generally stayed when an appeal is perfected, California’s Code of Civil Procedure has been amended to remove (automatic) stays in the case of motions to compel arbitration. Trial court proceedings will no longer be automatically stayed during the pendency of an appeal of an order dismissing or denying a petition to compel arbitration.
See https://legiscan.com/CA/text/SB365/2023
Retaliation Presumption
California’s Labor Code has been amended to provide a rebuttable presumption of retaliation if an employee suffers an adverse employment action with ninety (90) days of engaging in specified protected conduct. Additionally, existing law prohibits employers and their agents from making, adopting, or enforcing a rule, regulation, or policy preventing an employee from disclosing information to certain entities or from providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry if the employee has reasonable cause to believe that the information discloses a violation of a law, as specified. Though such conduct previously subjected employers to a civil penalty not to exceed $10,000.00 for each violation, now, employers face this penalty per employee, per violation.
See https://legiscan.com/CA/text/SB497/id/2844685
Prosecuting Labor Code Violations
Though the Department of Industrial Relations in the Labor and Workforce Development Agency is vested with certain enforcement duties and powers, now through January 1, 2029, public prosecutors (as defined) will be empowered to prosecute an action, either civilly or criminally, for violations of specified provisions of the Labor Code or to enforce those provisions independently. Monies recovered are to be first applied to payments due to affected workers, with all civil penalties recovered pursuant to those provisions to be paid to the General Fund of the state (unless otherwise specified). Notably, any agreement between an employer and employee mandating arbitration, or purporting to limit representative action, shall have no effect on the authority of the public prosecutor or the Labor Commissioner to enforce the code.
See https://legiscan.com/CA/text/AB594/id/2845272
Minimum Wage and Minimum Salary Increases plus Industry-Specific Updates
For all employees, California’s minimum wage increases to $16/hour, though some cities and counties require even higher minimums. This increase also affects the minimum salary for exempt employees, who must, effective January 1, 2024, earn no less than $66,560.00 annually.
Additionally, effective April 1, 2024, the hourly minimum wage for fast food restaurant employees will be $20/hour, and five (5) separate minimum wage schedules have been established for health care workers, depending on the nature of their employer.
The recall rights of grocery workers following a change in control of a grocery establishment have been changed, and the term “laid-off employee” has been redefined in terms of the rehiring and retention of displaced workers in the hospitality and business services industries. Such rights now apply to any employee who was employed for six (6) months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, reduction in force, or other economic non-disciplinary reason due to the COVID-19 pandemic. Finally, a presumption has also been created that a separation due to a lack of business, reduction in force, or other economic, non-disciplinary reason is due to a reason related to the COVID-19 pandemic (unless the employer establishes otherwise, by a preponderance of the evidence). The new law extends the previous sunset date of SB 93, which had addressed the rehire of employees laid off due to the COVID-19, from December 31, 2024, to December 31, 2025.
See
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1228; https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB525; https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB647; https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SB723; https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB93.
