Every New Year brings with it many new legal obligations for California employers, and this year is no exception. That means it’s time for California employers to review their policies and practices to ensure compliance with the new laws that, unless otherwise specified, go into effect January 1, 2023.
Below is a summary of some of the most notable of these new laws.
AB 1041: Expansion of CFRA and Paid Sick Leave to Care for “Designated Persons”
Under the California Family Rights Act (CFRA), an employer with five or more employees must provide eligible employees up to a total of 12 weeks of job-protected leave in any 12-month period for family care and medical leave as defined by the CFRA.
AB 1041 expands the class of people for whom an employee may take leave under the CFRA to include leave to care for a “Designated Person,” which under the CFRA, is defined as any individual related by blood or whose association with the employee is the equivalent of a family relationship. The designated person may be identified by the employee at the time the employee requests leave.
AB 1041 also expands the definition of “family member” under California’s Healthy Workplaces, Healthy Families Act of 2014 (California’s Paid Sick Leave Law) to include a “designated person,” which under California’s Paid Sick Leave Law includes any individual identified by an employee at the time a request for paid sick leave is made.
Under each amended law, an employer may limit an employee to one designated person per 12-month period.
AB 1041 amends Government Code Section 12945.2 and Labor Code Section 245.5.
Employers should update their CFRA and Paid Sick Leave policies to make sure that leave under both laws is available for employees caring for “designated persons”. In doing so, employers should also clarify that an employee is limited to one designated person per 12-month period.
AB 1601: Mass Layoffs
AB 1601 amends the California Worker Adjustment and Retraining Act (Cal/WARN Act). Cal/WARN prohibits an employer from ordering a mass layoff, relocation or termination, at a covered establishment (as defined by the law) without giving a written notice of the order to certain parties and entities, including the employees, the Employment Development Department (EDD), and specified local officials.
AB 1601 amends existing law to authorize the Labor Commissioner to enforce the notice requirements of Cal/WARN and to investigate an alleged violation, order appropriate temporary relief pending an investigation or hearing, and to issue a citation to violating employers.
AB 1949: Mandated Bereavement Leave
AB 1949 amends the CFRA to require private employers with five or more employees to provide up to five days of bereavement leave (which need not be taken in consecutive days) upon the death of a family member, which is defined to include a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law.
To be eligible for bereavement leave, an employee must have been employed for at least 30 days prior to the request for leave.
Employers may request “documentation” from the employee supporting the death of the family member, and which can include, but is not limited to, a death certificate, a published obituary, or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution, or governmental agency.
Bereavement leave, under this new law, may be unpaid. However, an employee may use other forms of paid leave for this purpose, including accrued paid vacation or paid sick leave.
If the employer’s existing leave policy provides for less than five days of paid bereavement leave, the employee is entitled to no less than a total of five days of bereavement leave, consisting of the number of days of paid leave under the employer’s existing policy, and the remainder of days of leave may be unpaid; but the employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee. And if the employer’s existing leave policy provides for less than five days of unpaid bereavement leave, the employee is entitled to no less than five days of unpaid bereavement leave; but the employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee.
Leave must be completed within three months of the family member’s death.
Under this new law, it is an unlawful employment practice for an employer to engage in discrimination or retaliation on the basis of an employee’s exercise of the right to take bereavement leave.
Employers must also maintain employee confidentiality of any employee requesting bereavement leave, and any documentation provided by the employee must also be maintained as confidential and not disclosed except to internal personnel or counsel, as necessary, or as required by law.
Employers should revise their existing bereavement leave policies to make certain that employees are provided with at least 5 days of bereavement leave upon the death of a family member, as defined. For example, a company offering three (3) days of paid bereavement leave should continue to offer the time off reflected in the policy and also allow employees to take an additional two (2) unpaid days off. Although the company would not be required to add two (2) additional days as a paid benefit under its policy, it would need to allow employees to utilize accrued vacation, personal leave, sick leave, or other compensatory time off that is otherwise available to the employee.
Employers not currently providing bereavement leave, must offer employees five (5) days of leave, but do not need to provide any new paid leave beyond what is currently offered to employees. Employees must be permitted to use any accrued but unused paid leave they have at the time of the bereavement leave.
Bereavement leave policies should also make clear that an employee will not suffer no adverse employment action based on their exercise of the right to take bereavement leave.
AB 2188: Off-Duty Cannabis Use Protected under California’s Fair Employment and Housing Act [Effective January 1, 2024]
AB 2188 amends the California Fair Employment and Housing Act (FEHA) to make it unlawful for an employer to discriminate against an employee or job applicant based on the person’s use of cannabis off the job and away from the workplace, or upon an employer-required drug screening test that has found the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids. Employers may still conduct preemployment drug testing and may still refuse to hire someone based on a valid preemployment drug screening that does not screen for non-psychoactive cannabis metabolites.
Nothing in AB 2188 permits an employee to possess, be impaired by or use cannabis on the job, and the law does not affect an employer’s rights and obligations in keeping a drug and alcohol-free workplace.
This bill amends Section 12954 to the Government Code.
Policies should also be updated in accordance with the new law, once in effect.
SB 523: Contraceptives Equity Act of 2022
SB 523 amends the FEHA to make it unlawful for an employer to discriminate against an applicant or an employee based on their “reproductive health decisionmaking,” defined as “a decision to use or access a particular drug, device, product or medical service for reproductive health.”
The law makes clear that discrimination based on “sex” also includes reproductive health decisionmaking.
Employers will also be prohibited from requiring, as a condition of employment, continued employment, or a benefit of employment, the disclosure of information relating to an applicant’s or an employee’s reproductive health decisionmaking.
Company EEO and anti-discrimination, harassment, and retaliation policies should be revised to make clear that “sex” includes reproductive health decisionmaking.
SB 1162: Pay Scale Disclosure and Pay Data Reporting Requirements
SB 1162 is a broad new pay transparency and pay scale disclosure law that, among other things, requires employers to include pay ranges in all job advertisements beginning on January 1, 2023.
Pay Scale Disclosure Requirements
Starting on January 1, 2023, SB 1162 expands these requirements by:
- Requiring employers with 15 or more employees to include the pay scale, meaning the “salary or hourly wage range that the employer reasonably expects to pay for the position,” in any job posting. If the employer uses a third party to publish or post a job, they must provide the pay scale to that third party who must include it in the posting.
- Requiring all employers, regardless of size, to provide the pay scale for the position in which a current employee is employed, upon request.
- Requiring all employers, regardless of size, to maintain records of job titles and wage rate histories for all employees during their employment and for three years thereafter. These records must be made available to the state’s labor commissioner – who is authorized to inspect these records – so that the labor commissioner can “determine if there is still a pattern of wage discrepancy.” Employers should revise their existing record retention policies to ensure compliance with this new law.
SB 1162 establishes a civil penalty of up to $10,000 per violation of its pay scale disclosure and job posting requirements.
The new law also creates a private right of action for violations of the pay scale transparency law within one year of learning of the violations and creates a rebuttable presumption in favor of an employee should an employer fail to maintain the records of each employee’s job title and pay rate history for the specified timeframe.
Annual Pay Data Report
SB 1162 also greatly expands current pay data reporting to now require all employers with 100 or more employees to submit a pay data report to California’s Civil Rights Department (the “CRD”, formally the Department of Fair Employment and Housing) annually on the second Wednesday in May, beginning on May 10, 2023.
The Annual Pay Data Report must include the number of employees by race, ethnicity, and sex within each of the following 10 job categories:
- Executive- or senior-level officials and managers
- First- or mid-level officials and managers
- Sales Workers
- Administrative support workers
- Craft workers
- Laborers and helpers
- Service workers
The Annual Pay Data Reports must also include:
- The median and mean hourly rates, within each of the above listed job categories, by race, ethnicity and sex;
- The number of employees by race, ethnicity, and sex whose annual earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics Survey; and
- The total number of hours worked by each employee in each pay band during the reporting year.
Employers with multiple establishments will have to submit a separate report for each covered establishment.
Also, employers with 100 or more employees hired through labor contractors (such as temporary staffing agencies) in the prior calendar year must also submit a separate pay data report to the CRD for these workers and disclose the ownership names of all labor contractors used to supply the workers.
Failure to file the required reports can result in civil penalties of $100 per employee for initial violations, and up to $200 per employee for subsequent violations.
To prepare for the new disclosure requirements, employers should:
- Determine the salary or hourly wage range for all existing positions;
- Maintain job title and pay rate history records in advance of the January 1, 2023 effective date, and going forward, in order to ensure compliance with SB 1162’s record-keeping requirements, e.g., document job titles and wage rate histories for every employee during their employment, as well as for three years after the end of employment; and
- For employers with at least 15 employees, review job postings to make certain that pay scale information is disclosed in all job postings going forward
SB 1044: New Employee Protections in Emergency Conditions
SB 1044 Prohibits an employer, in the event of an “emergency condition,” from taking or threatening adverse action against any employee who refuses to report to, or leaves, a workplace or worksite because the employee has a “reasonable belief that the workplace or worksite is unsafe.”
“Emergency condition,” under SB 1044, means the existence of either of the following:
- Conditions 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
- An order to evacuate a workplace, worksite, worker’s home, or the school of a worker’s child due to natural disaster or a criminal act.
The law specifically excludes health pandemics from the definition of “emergency condition.”
The above provisions do not apply to certain employees, such as first responders, disaster service workers, certain health care facility employees, residential care facility employees and others.
In the event of an “emergency condition,” employers may not prevent employees from accessing their mobile device or other communications device to get emergency assistance, assess the safety of the situation, or communicate with someone to confirm their safety.
The law requires employees, “when feasible,” to notify employers of the emergency condition requiring the employee to leave or refuse to report to the workplace or worksite prior to leaving or refusing to report. If it’s not feasible, then the employee must notify the employer of the emergency condition that required the employee to leave or refuse to report to the workplace or worksite after leaving or refusing to report.
In the event a current or former employee brings an action that could be brought pursuant to the Labor Code Private Attorneys General Act (PAGA) for violations of these prohibitions, the bill gives employers the right to cure alleged violations as set forth in Section 2699.3.
Employers should train their managers and supervisors so that they understand an employee’s rights during an emergency. Existing emergency protocols and procedures should also be updated to reflect an employee’s rights in the event of an emergency condition.
AB 2693: Changes to California’s COVID-19 Exposure Notification Requirements
Prior law required employers to provide written notice of a potential COVID-19 exposure within one business day to all employees who were at the worksite and to report cases to local health departments under certain circumstances. This notification requirement was scheduled to expire on January 1, 2023. However, AB 2693 extends this reporting requirement by one year to January 1, 2024 and provides employers with an option when complying with these notification requirements.
As an alternative to providing individual written notice to employees, AB 2693 now allows employers to satisfy the notice requirements by posting a notice “in all places where notices to employees concerning workplace rules or regulations are customarily displayed” (including online portals, as applicable), rather than distribute it. Alternatively, an employer can provide individual written notice of a potential exposure in the same manner as previously required.
The notice must be posted within one business day from when the employer receives notice of a potential COVID-19 exposure and must remain posted for no less than fifteen calendar days. The notice must be in English and in a language understood by the majority of employees.
Employers must keep a log of all dates the notice was posted at each worksite of the employer and must allow the Labor Commissioner to access these records.
AB 2693 also removes the requirement that employers report cases to their local health department.
AB 1751: COVID-19 Rebuttable Workers’ Compensation Presumption
In 2020, SB 1159 established a rebuttable workers’ compensation presumption that an employee’s COVID-19 illness was sustained in the course of employment for purposes of worker’s compensation benefits. The presumption was originally set to expire on January 1, 2023, but AB 1751 extended the presumption another year to January 1, 2024.
SB 1126: CalSavers Retirement Savings Program Expanded to Employers with at Least One Employee
Under existing law, employers with five or more employees that do not sponsor a retirement savings plan are required to participate in CalSavers and offer a payroll deposit retirement savings arrangement so that employees may contribute a portion of their salary or wages to a retirement savings program account in the program.
SB 1126 expands the definition of “eligible employer” to include a person or entity with at least one eligible employee, down from five eligible employees. Excluded from the definition of “eligible employer” are sole proprietorships, self-employed individuals, or other business entities that do not employ any individuals other than the owners of the business.
The bill requires eligible employers that do not offer an employer-sponsored retirement savings program, to have a payroll deposit savings arrangement by December 31, 2025, so that employees can participate in the program.
Minimum Wage Increase
Effective January 1, 2023, the California state minimum wage will increase to $15.50 per hour for employers of all sizes.
Note: Certain California cities have enacted minimum wage ordinances that exceed the state minimum wage. For example, in the City of Los Angeles, the minimum wage is $16.04 per hour for all employers. In Malibu, Santa Monica and unincorporated Los Angeles County, the minimum wage is currently $15.96 for all employers. In Pasadena, the current minimum wage is $16.11 per hour for all employers. On July 1, 2023, in these locations, minimum wage will be adjusted based on the Consumer Price Index (CPI).
Because of the state’s minimum wage increase, there is also a corresponding increase in the minimum salary that must be paid to an employee exempt under the administrative, executive, and professional overtime exemptions. In California, exempt employees must receive a salary of at least twice the state minimum wage for a 40-hour workweek. Accordingly, starting January 1, 2023, exempt employees must receive a minimum annual salary of $64,480 for employers of all sizes.
These new laws are vast and complex. Employers should review their policies, forms and practices to ensure compliance with these new laws. Please contact us if you have any questions regarding these updates as well as how to comply with these new changes in California law.