Several new laws passed by the California Legislature will go into effect on January 1, 2023, that will affect the workplace. These laws include changes to various state labor and employment regulations, as well as an increase in the minimum wage. This alert provides a summary of some of the key employment laws that will be implemented on this date, unless otherwise noted.
The California Legislature has enacted several new laws that will impact the workplace in 2023. This Holland & Knight alert provides a brief summary of select employment laws that go into effect on Jan. 1, 2023, unless stated otherwise.
- Minimum Wage Increases: As of Jan. 1, 2023, the California state minimum wage will increase to $15.50 for all employers, regardless of employee headcount. This also means that as of Jan. 1, 2023, exempt employees in California must be paid a minimum annual salary of $64,480.
"Living wage ordinances" in various locales within the state have been enacted, so local standards should be confirmed to ensure compliance with all governing wage requirements.
Covered exempt computer professional employees must be paid a minimum of $53.80 per hour, or $112,065.20 in annual salary.
- SB 1162 (Expanded Pay Data Reporting and Mandatory Pay Scale Disclosures): This bill requires private employers with 100 or more employees to submit a pay data report to the Civil Rights Department annually on or before the second Wednesday of May, beginning May 10, 2023. The pay data report is separate from an employer's EEO-1 and must include the median and mean hourly rate for each combination of race, ethnicity and sex within each job category. Additionally, beginning Jan. 1, 2023, employers with 15 or more employees must include the pay scale for a position in any job posting. Employers must also provide an employee with the pay scale for the employee's current position upon the employee's request
- AB 1041 (CFRA and Paid Sick Leaves Expanded to Cover Employee's Care for "Designated Person"): This bill expands on the categories of individuals for whom an employee may take leave to care for under the California Family Rights Act (CFRA) and California's Healthy Workplaces Healthy Families Act (HWHFA). Under the amended CFRA, an employee may take unpaid leave to care for a "designated person," defined as "any individual related by blood or whose association with the employee is the equivalent of a family relationship." Similarly, an employee may take paid leave to care for a "designated person" under the amended HWHFA, defined as "a person identified by the employee at the time the employee requests paid sick days." Under both the amended CFRA and HWHFA, an employee may identify a designated person at the time they request leave. An employer, however, may limit an employee to one designated person per 12-month period.
- AB 1949 (New Requirement to Provide Five Days of Bereavement Leave): AB 1949 requires covered employers to offer employees up to five days of bereavement leave. Under AB 1949, employees who have been employed for at least 30 days may take five days of bereavement leave for a family member, defined as a spouse, domestic partner, child, parent, parent-in-law, sibling, grandparent or grandchild. Bereavement leave need not be taken consecutively, but, it must be completed within three months of the death. Notably, the statute states that leave "shall be taken pursuant to any existing bereavement leave policy of the employer." Therefore, employers have three options for compliance depending on current practice: 1) If no existing bereavement leave policy exists, then the five days mandated by the new law may be unpaid; 2) If an existing policy provides for less than five days of paid bereavement leave, employees are entitled to take not less than a total of five days of leave, consisting of the number of paid days of leave available under policy with the remaining days to be unpaid (e.g., a policy providing for two paid days of bereavement leave would result in an employee taking two days of paid bereavement leave and three days of unpaid bereavement leave under the law); or 3) If an existing policy provides for less than five days of unpaid bereavement leave, employees are entitled to take not less than a total of five days of unpaid bereavement leave. In all situations, employees may use vacation, personal leave, sick leave or other compensatory time off to substitute for unpaid leave. Interfering with leave or improperly denying leave are unlawful employment actions; however, an employer is permitted to ask for proof of documentation of death within 30 days of the first day of leave.
- AB 2693 (Updated Requirements for COVID-19 Exposure Notification Requirements to Employees): In light of the COVID-19 pandemic, California law previously required employers to provide written notice of potential COVID-19 exposure to employees within one day of receiving notice of such exposure. This bill revises an employer's COVID-19 notification requirement by authorizing an employer to alert employees to a potential exposure of COVID-19 by prominently displaying the exposure notice. This bill will no longer require employers who experience a COVID-19 outbreak in their workplace to notify the local public health agency within 48 hours.
- SB 1044 (Retaliation Prohibited in the Event of an Emergency Condition): This legislation protects employees from adverse action by their employer if they choose not to report to or leave the workplace during an emergency situation in which they believe the workplace or worksite to be unsafe. An "emergency condition" is defined as either: (1) a natural disaster or other extreme danger to the safety of people or property at the workplace or worksite, or (2) an evacuation order due to a natural disaster or criminal act. However, this does not include health pandemics. The law also prohibits employers from preventing employees from accessing their mobile devices or other communication methods for emergency assistance or to assess the safety of the situation. Employees are required to notify their employer of the emergency situation that requires them to leave or refuse to report to the workplace. These protections do not apply when the emergency situation causing an imminent risk of harm has ended.
- AB 2777 (Statute of Limitations Extended for Sexual Assault Claims): This bill allows individuals to file lawsuits seeking damages for sexual assault that occurred on or after January 1, 2009, and would have otherwise been barred by the statute of limitations. It also revives claims for damages resulting from sexual assault that occurred after the plaintiff's 18th birthday, provided that one or more entities are legally responsible for the damages and their agents engaged in a "cover up," as defined in the bill. These revived claims must be filed between January 1 and December 31, 2023, and cannot have been litigated to finality or settled in a written agreement before January 1, 2023. This revival of claims will be in effect until December 31, 2026.
- AB 2068 (Requires Employers to Post OSHA Information Regarding Citations or Orders in English and Other Specified Languages): AB 2068 requires that certain Cal-OSHA information be posted in the workplace in multiple different languages. The bill aims to narrow the gap between California's regulatory environment – which often requires English-only notification – and California's increasingly diverse, skilled workforce. Under the new law, any time Cal-OSHA issues a citation, order or special order that is required to be posted in the workplace, the employer must post the citation/order/notice in English and the top seven non-English languages used by limited-English-proficient adults in California, as determined by the most recent U.S. Census Bureau American Community Survey, plus Punjabi (if not already included in the top seven). Cal-OSHA is responsible for drafting the alternate-language notices, which, like their English counterparts, must be posted at or near each place a violation referred to in the order/citation occurs.
- AB 2188 (Protections for Off-Site, Off-Duty Marijuana Use Beginning Jan. 1, 2024): This bill amends the FEHA by adding a provision explicitly protecting a person's off-site, off-duty marijuana use. The bill prohibits employers from discriminating against applicants or employees because they have 1) used cannabis off the job and away from the workplace; or 2) were found to have non-psychoactive cannabis metabolites in their hair, blood, urine or other bodily fluids by a drug screening test. However, the bill does not cover all workers. Additionally, employers may still use scientifically valid drug tests conducted through methods that screen for current impairment, as AB 2188 does not permit employees to possess, be impaired by or use cannabis on the job, even for medicinal purposes. It also does not eliminate an employer's right to maintain a drug- and alcohol-free workplace under current health and safety laws. The bill will take effect on Jan. 1, 2024, giving employers one year to update their policies, practices and procedures and to train personnel for the changes.
- SB 1126 (Expands California's State-Run Retirement Program): Under existing law, eligible employers are required to offer a payroll deposit retirement savings arrangement to allow eligible employees to participate in CalSavers, if the employer does not sponsor or participate in a retirement plan. This bill expands an "eligible employer" to include a person or entity that has at least one eligible employee while excluding sole proprietorships, self-employed individuals or other business entities that do not employ any individuals other than the business owners. This bill will also expand the CalSavers program to include eligible employers with one or more eligible employees by Dec. 31, 2025.
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