Once again, California employers will welcome in the new year with a slew of new laws. Below is a summary of some of the new laws most California employers will need to know in 2024. Many will require adjustments to existing policies and practices. Unless otherwise noted, all new laws are effective January 1, 2024. We also have a reference guide that you can download here.
For more in-depth coverage of these new laws and others, please join us for a complimentary webinar on January 17, 2024, from 12:00 p.m. to 1:30 p.m., presented by RJO shareholders Gayle Athanacio and Dennis Huie and senior counsel Virginia Young.
Time Off From Work
2024 will bring major changes to California’s paid sick leave law and introduce a new form of required unpaid leave for reproductive loss. Employers will need to review and update their policies to ensure compliance in the new year.
Paid Sick Leave Expansion
As previously reported, the new year will bring significant changes to the paid sick leave requirements of California Healthy Families, Healthy Workplaces (“HFHW”) law. Employers may still choose between frontloaded “lump sum” and accrual-based sick leave policies. However, employers who choose to provide a lump sum of sick leave every year without carryover will now have to provide the greater of 5 days or 40 hours of sick leave each year. Employers who use accrual-based paid sick leave policies will also see changes: the minimum accrual cap allowed will increase from 6 days (48 hours) to 10 days (80 hours). SB 616 makes similar changes to requirements for grandfathered policies or accrual policies based on more than 1 hour per 30 hours worked. Employers who limit the amount of sick leave employees may use to 3 days or 24 hours per year, as currently allowed by HFHW, will need to raise those limitations to 5 days or 40 hours.
Unpaid Leave for Reproductive Loss
SB 848 requires employers of 5 or more employees to provide an employee who has worked for the employer for at least 30 days up to 5 days of unpaid leave in the event of a “reproductive loss event.” “Reproductive loss event” is defined as “failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.”
Employees do not have to use the 5 days of leave consecutively but must use them within 3 months of the event. Employees who experience reproductive loss events multiple times may take reproductive loss leave multiple times, up to 20 days in a 12-month period.
Unpaid reproductive loss leave is in addition to California Family Rights Act (“CFRA”) leave and unpaid bereavement leave. Employees may use vacation and sick leave during their unpaid reproductive loss leave.
Discrimination, Harassment and Retaliation
Protections against discrimination for the off-duty use of cannabis and limitations on the use of drug tests for cannabis will go into effect on January 1, 2024. Additionally, amendments to the California Labor Code will make it easier for employees to pursue certain retaliation claims.
Off-Duty Use Of Cannabis and Drug Testing
In 2022, the legislature passed AB 2188, prohibiting employers from discriminating against employees and applicants based on their use of cannabis off-duty and away from the workplace, or the presence of non-psychoactive cannabis metabolites in their hair, blood, urine or other bodily fluids pursuant to an employer-required screening test. Although passed in 2022, AB 2188 has a delayed effective date of January 1, 2024, and was amended by this year’s SB 700.
The new cannabis law effective January 1, 2024, is found in Government Code section 12954. This section does not prohibit employers from enforcing rules against the use, possession or distribution of cannabis or impairment at work. Notably, it does not apply to “employees in the building and construction trades” or applicants or employees hired for positions that require a federal government background investigation or security clearance. Similarly, this new cannabis law expressly does not preempt state or federal laws requiring applicants or employees to be tested for controlled substances as a condition of employment, receiving federal funds or federal licensing-related benefits or entering into federal contracts.
The new Government Code as amended by SB 700 further prohibits employers from asking job applicants, including those in the construction and building trades, about their prior use of cannabis. Discrimination based on information about a person’s prior cannabis use obtained from the person’s criminal history is prohibited unless the employer is permitted to consider or inquire about prior cannabis use under state or federal law.
To comply with these new laws, employers will need to review their policies and procedures relating to drug testing, hiring and standards of conduct.
Stronger Anti-Retaliation Laws
SB 497 makes it easier for employees who engage in certain protected activities under the California Labor Code, such as filing complaints with the Labor Commissioner or enforcing equal pay complaints, to make retaliation claims. If an employee who engages in a protected activity experiences an adverse employment action, such as termination or demotion, within 90 days of the protected activity, SB 497 creates a presumption of illegal employer retaliation. The burden then shifts to the employer to show a legitimate non-retaliatory reason for the action. Even then, the employee can still argue that the action was nonetheless retaliatory.
SB 497’s presumption of retaliation based solely on a temporal element is a notable shift in the legal framework. This change only serves to reinforce employer best practices: document performance and disciplinary issues timely and thoroughly and ensure consistency in taking adverse action against employees.
New Requirements To Address Workplace Violence
SB 553 requires most California employers to establish, implement and maintain an effective workplace violence prevention plan by July 1, 2024. Plans can be stand-alone or part of the Illness and Injury Prevention Program (IIPP). The new requirements are detailed and include a requirement to review and evaluate the effectiveness of the workplace violence program plan “at least annually when a deficiency is observed or becomes apparent and after a workplace violence incident.”
The requirements apply to most employers, although there are notable exceptions, including employees teleworking from a location of the employee’s choice and small establishments (less than 10 employees) not open to the public.
Cal/OSHA will enforce the workplace violation prevention plan requirements. The agency is required to propose standards by December 1, 2025, and adopt standards by December 1, 2026.
COVID-19 Cal/OSHA Regulations
COVID-19 is no longer a topic of daily conversation for many employers, but employers should not lose sight of the fact that Cal/OSHA’s COVID-19 Non-Emergency Regulations remain in effect until February 3, 2025, with recordkeeping requirements in place for an additional year.
Also, SB 723 extends recall rights for employees laid off due to COVID-19 for employees in the hospitality and service industry. Those recall rights, established by SB 93 in 2021, will now sunset on December 31, 2025, instead of December 31, 2024. SB 723 also adds a presumption 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.
Some COVID-19-related requirements are scheduled to sunset at the end of 2023, including the requirement for employers to notify their workers’ compensation carrier if an employee tests positive, and Labor Code section 6409.6, requiring detailed notices of COVID-19 exposure in the workplace. Employers should keep in mind that Cal/OSHA’s Non-Emergency regulations still require notice of close contacts as soon as possible, and in no case longer than the time required to ensure that applicable exclusion requirements are met.
Wage and Hour
California’s Minimum Wage
On January 1, 2024, California’s minimum wage will increase to $16.00 per hour regardless of employer size. Minimum salaries for California’s white-collar exemptions, which must be equivalent to “no less than two times the state minimum wage for full-time employment”, will also increase. Employers should also check local minimum wage laws and contract requirements as many require higher hourly rates.
Industry-Specific Minimum Wage Requirements
Employees in certain industries will see even higher minimum wage hikes in 2024.
Employees of “National Fast-Food Chains”
Last year, the Governor signed the Fast-Food Accountability and Standards Recovery Act (or FAST Recovery Act), which would have established a Fast Food Council (“Council”) to promulgate minimum employment standards for employees of chain fast food restaurants. Almost immediately the law was paused pending a referendum of the California voters in November 2024.
This year, labor and employer negotiations resulted in AB 1288, which repeals the FAST Recovery Act, withdraws the referendum and establishes the Fast-Food Council to establish an hourly minimum wage for employees of “national fast food chains.” A “national fast food chain” is a set of limited-service restaurants with more than 60 establishments nationally that: (1) share a common brand, or are characterized by standardized options for decor, marketing, packaging, products and services, and (2) are primarily engaged in providing food and beverages for immediate consumption on or off premises where patrons generally order or select items and pay before consuming, with limited or no table service.
The minimum wage for employees of a “national fast-food chain” will rise to $20 per hour on April 1, 2024. The Council may adjust the minimum wage on an annual basis beginning January 1, 2025, through 2029, with increases limited to the lower of 3.5% or the rate of change in the US CPI for the prior year. The minimum wage shall become the state minimum wage for covered workers. The Council is also charged with developing minimum employment standards for covered employees, including, as appropriate, standards on wages, working conditions, and training, but must petition Cal/OSHA or the Civil Rights Department for standards falling under those agencies’ jurisdiction.
Under SB 525, a statewide minimum wage law will apply to health care workers at “covered health care facilities” beginning June 1, 2024. The law applies to a broad range of healthcare facilities, including, but not limited to, hospitals, clinics, home care agencies and residential care facilities. The exact amount of the minimum wage and the exact timing of the increases will depend on the type of facility. Initial minimum wage rates, beginning June 1, 2024, will range from $18 per hour to $23 per hour.
Pay and Expense Reimbursement For Employees Who Need Food Handler Cards
SB 476 amends the Health and Safety Code to require employers to treat the time employees spend to complete required food handler training and examinations as compensable hours. Employers must also relieve employees of other work duties while the employee is taking the food handler training course and examination and reimburse employees for expenses associated with obtaining the food handler card. Employers cannot condition employment on an applicant having a preexisting food handler card. Employers should review their hiring practices as well as practices for existing employees who need to obtain or renew food handler cards.
Construction Industry: Contractor State Licensing Board Limitations On Independent Contractors
California employers are subject to some of the strictest independent contractor laws in the country. Beginning January 1, 2024, specialty contractors face further restrictions on the use of independent contractors and potential discipline by the Contractors State Licensing Board (CSLB) for violations. AB 1204 prohibits a licensed specialty contractor (as defined by Business and Professions Code section 7058) from subcontracting with more than one contractor in the same license classification on the same single project or undertaking unless the subcontractor uses persons who are classified as employees to perform the work in the relevant classification or the specialty contractor is a signatory to a bona fide collective bargaining agreement. Violation of this requirement can subject the specialty contractor to discipline at the CSLB. There are over forty specialty contractor license classifications, including concrete, drywall, carpentry, electrical, flooring, landscaping, roofing, sheet metal and solar.
AB 636 makes changes to the Wage Theft Prevention Act Notice California employers are required to give to non-exempt employees. Effective January 1, 2024, at the time of hiring employers must include 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, that was issued within 30 days before the employee’s first day of employment, that may affect their health and safety during their employment.
For employees working pursuant to a federal H-2A agricultural visa, specific information, in Spanish and English if requested by the employee, is required about an agricultural employee’s rights under California law.
The California Labor Commissioner is required to publish an updated 2810.5 notice template on its website by March 1, 2024.
Further Restrictions On Non-Competes
California Business & Professions Code section 16600 voids agreements to restrain post-employment competition, except in connection with the sale or dissolution of a business, partnership, or LLC. Courts have extended this broad prohibition to non-solicitation agreements. Two new laws take existing prohibitions a few steps further.
SB 699 voids an agreement that violates section 16600, regardless of where the contract was signed and where the employment was maintained. Additionally, under SB 699 an employer who enters into or attempts to enforce an agreement that violates section 16600 has committed a civil violation and is subject to a private right of action where the employee, ex-employee or prospective employee can collect attorneys’ fees.
AB 1076 affirms that section 16600 is to be construed broadly “to void any noncompete agreement in an employment context that does not meet one of [the] limited exceptions.” The new law makes including – or requiring an employee to sign – such a noncompete unlawful. Additionally, AB 1076 requires employees to notify employees or former employees who were employed after January 1, 2022 and signed a non-compete agreement that does not satisfy an exception to section 16600, that the clause or agreement is void. Notice must be made by February 14, 2024, in writing, and delivered to the last known address and email address of the employee.
Currently, when a party appeals an order dismissing or denying a petition to compel arbitration, trial court proceedings are stayed until after the appeal has concluded. SB 365 changes this by amending Code of Civil Procedure section 1294 to state that trial court proceedings will not be automatically stayed while an appeal is pending on whether a case must be sent to arbitration. It is now left to the court’s discretion. Challenges to SB 365 based on federal preemption are expected.
Once again, a new year means new challenges for California employers. We hope that you will join us on January 17 for our complimentary webinar for further coverage of these new laws and other legal developments that will affect California employers in the coming year.
Rogers Joseph O’Donnell’s Labor and Employment Law Practice Group is comprised of seasoned attorneys with extensive experience representing and advising businesses, government contractors and public entity employers.
The depth and breadth of our employment law experience allow us to offer the same quality of representation usually expected from much larger law firms, while our relatively small size enables us to maintain highly competitive rates and a more direct and personal relationship with our clients.
Our labor and employment practice encompasses counseling and defending employers against single and multiple plaintiff litigation, class, collective, and PAGA actions. While we believe that early case evaluation and mediation are often advantageous ways to minimize the costs and disruption of protracted litigation, we are also skilled, trial-ready attorneys with a winning record in court, administrative hearings and arbitration.
If you have questions about California labor and employment law, please contact the Rogers Joseph O’Donnell attorney you work with or email us at firstname.lastname@example.org.