By Melanie M. Ghaw, Esq. & Stacy L. Fode, Esq
While California’s legislative session may have just ended, employer obligations under several new laws are just beginning. This top ten roundup of recently enacted workplace laws summarizes key points of legislation signed into law by Governor Newsom this Fall that are significant to California employers. All laws take effect immediately unless otherwise specified.
1. Employers have expanded paid sick leave requirements.
On October 4, 2023, Governor Newsom signed into law SB616, which amends the Healthy Workplaces, Healthy Families Act of 2014 to expand employees’ eligibility and entitlement to paid sick leave effective January 1, 2024. Significant changes include the following:
- Increased annual amount of paid sick leave entitlement to five days or 40 hours;
- Increased annual usage cap to five days or 40 hours;
- Increased annual carryover cap to ten days or 80 hours; and
- Modifications to accrual requirements.
For additional information regarding these amendments to California’s paid sick leave law, please see our recent eAlert available HERE.
2. Revised Fair Chance Act regulations impose additional obligations on employers when considering or taking adverse action based on an applicant’s criminal history.
On October 1, 2023, California implemented revised regulations interpreting the Fair Chance Act (“FCA”), which significantly changed the criminal background check process and imposed additional obligations on employers when considering an applicant’s criminal history and prior to taking adverse action against an applicant based on their criminal history. The revised regulations extend coverage of the FCA beyond traditional “applicant”/“employer” definitions and also provide an extension of time for applicants to respond to a pre-adverse action letter. Additionally, employers now are prohibited from taking the following actions:
- Including indirect no-hire statements in job advertisements, applications, and other materials;
- Considering criminal history information prior to extending a conditional offer, even if the information is provided voluntarily by the applicant; and
- Revoking a conditional offer of employment based on conviction history without conducting an initial individualized assessment and considering evidence of rehabilitation or mitigating circumstances.
For more information on complying with the FCA’s revised regulations, please see our prior eAlert available HERE.
3. Employers face further prohibitions against noncompete agreements.
On September 1, 2023, Governor Newsom signed into law SB699, which amends the California Business & Professions Code Section 16600 to prohibit employers from entering into or attempting to enforce non-compete agreements, regardless of when and where the agreement was signed. Shortly thereafter, on October 13, 2023, Governor Newsom signed into law AB1076, which will require employers to notify current and former employees (employed after January 1, 2022) in writing by February 14, 2024, that any unlawful noncompete clause or agreement to which they were subject is void.
For additional information regarding California’s continued crackdown against noncompete provisions, please see our eAlert available HERE.
4. Employees are entitled to unpaid leave for reproductive loss.
On October 10, 2023, Governor Newsom signed into law SB848, which amends the California Fair Employment and Housing Act (“FEHA”) to require private employers with five or more employees, and all public employers, to provide employees who have been employed for at least 30 days with up to five days of leave following a failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction. The leave must be taken within three months of the event. If an employee experiences more than one reproductive loss event within a 12-month period, the employer only is required to provide up to 20 days of leave.
Employees may apply any paid time off, including accrued and available paid sick leave, otherwise available to the employee under company policy to the time taken for reproductive loss. If an employer does not have an existing leave policy or the employee has exhausted other available paid leave, the reproductive loss leave may be unpaid. Employees who take reproductive loss leave are not required to provide documentation supporting their request for leave, and employers must maintain the confidentiality of an employee requesting the leave. The law will take effect on January 1, 2024.
5. Employers are required to establish and implement Workplace Violence Prevention Programs.
On September 30, 2023, Governor Newsom signed into law SB553, which adds a new section to the California Labor Code and will be implemented by the California Occupational Safety and Health Act. The law applies to all employers, except those with places of employment where less than 10 employees are present at one time and the workplace is not accessible to the public; the employees work remotely from a location of their choice over which the employer has no control; and certain healthcare, law enforcement, and correctional facilities.
By July 1, 2024, covered employers are required to take a number of steps to comply with the new law:
- Establish and implement a written Workplace Violence Prevention Plan (“WVPP”);
- Provide effective training to employees on the WVPP and additional training when a previously unrecognized workplace violence hazard has been identified or changes are made to the WVPP;
- Record violent workplace incidents in a violent incident log; and
- Create and maintain records of all training; workplace incident investigations; and actions related to workplace violence hazard identification, evaluation, and correction. All required records must be maintained for a minimum of five years, with the exception of training records, which must be maintained for a minimum of one year.
The WVPP must be written and easily accessible to employees (e.g., posted on the company intranet or common area bulletin boards) and must include:
- The names of the individuals responsible for implementing the program;
- A system to identify and evaluate workplace hazards;
- The methods and procedures to correct unsafe or unhealthy conditions and practices in a timely manner;
- An occupational health and safety training program to teach employees safe and healthy work practices with instructions specific to each employee’s job duties;
- A system to communicate with employees on health and safety matters and encourage employees to inform employers of worksite hazards without fear of retaliation;
- A system to ensure employees’ compliance with safe and healthy work practices (including discipline); and
- Procedures to address the following:
– Accept and respond to reports of workplace violence;
– Communicate workplace violence matters with employees;
– Investigate employee concerns;
– Respond to workplace violence emergencies; and
– Post-incident response and investigation.
Employers must provide training for employees when the WVPP is first established and annually thereafter. The training must address:
- The WVPP, including how employees can obtain copies of the WVPP and participate in the development and implementation of the WVPP;
- The definitions and requirements under the law;
- Procedures to report workplace violence incidents or concerns without fear of retaliation;
- Workplace violence hazards specific to the employees’ jobs, including corrective measures implemented and strategies to avoid physical harm;
- The workplace violent incident log and how to obtain copies of records; and
- An opportunity for interactive questions and answers.
6. Employees who engage in a protected activity receive increased protection against retaliation.
On October 8, 2023, Governor Newsom signed into law SB497, which amends the Labor Code, as of January 1, 2024, to create a rebuttable presumption of retaliation if an employer takes any adverse action against an employee within 90 days of the employee engaging in any activity protected under the law, including filing a complaint or claim relating to their rights under the jurisdiction of the Labor Commissioner, making a complaint about unpaid wages, opposing unfair pay practices, or otherwise engaging in lawful actions protected by the Labor Code. Employees asserting a claim for violation of this law must commence the action within one year of the alleged retaliatory action and only need to show the protected activity and subsequent adverse action. The employer then has the burden of rebutting the presumption.
7. Applicants and employees receive expanded protection for cannabis use.
On October 7, 2023, Governor Newsom signed into law SB700, which expands protections for cannabis users under FEHA. The law would prohibit an employer from requesting information from applicants relating to the applicant’s prior use of cannabis, including information obtained from an applicant’s criminal history, unless such an inquiry is exempt under other state or federal law. This law expands on AB2188, signed by Governor Newsom in 2022, which prohibits adverse employment action against an individual for their off-duty and off-premises cannabis use and drug test results that identify non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids. Both SB700 and AB2188 are effective January 1, 2024.
8. Employees who suffer workplace harassment or discrimination receive additional TRO protections.
On September 30, 2023, Governor Newsom signed into law SB428, which amends the California Code of Civil Procedure to authorize any employer to seek a temporary restraining order and injunction on behalf of an employee (including volunteers and independent contractors) who has suffered harassment. Prior to this amendment, employers only were able to seek temporary restraining orders on behalf of employees who suffered unlawful violence or a credible threat of violence that could reasonably be construed to be carried out at the workplace. The amended law defines “harassment” as “a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose. . . . which would cause a reasonable person to suffer substantial emotional distress, and must actually cause substantial emotional distress.”
The law also allows an employee’s collective bargaining representative in employment or labor matters at the workplace to seek a restraining order on behalf of that employee. An employee on whose behalf the temporary restraining order is being sought may decline to be named in the order; in such an instance, the employee or collective bargaining representative may still file the petition. The law contains a provision to prevent courts from issuing restraining orders that prohibit constitutionally protected speech and activities protected by the National Labor Relations Act.
Additionally, on October 10, 2023, Governor Newsom signed into law AB933, which amends the California Civil Code to provide further protection to victims of sexual offenses who are sued under state defamation law. The law, effective January 1, 2024, expands the definition of a “privileged communication,” which is protected from civil action, to include factual information related to acts of sexual assault; sexual harassment; harassment or discrimination, including those that occur in the workplace, and failure to prevent such an act or retaliation for reporting such an act; and cyber sexual bullying.
The law only protects those who actually experienced the underlying conduct, whether or not they filed a complaint, and have a “reasonable basis to file a complaint” regarding the alleged conduct. Under this law, a prevailing defendant in a defamation action brought against the defendant for making a privileged communication will be entitled to recover reasonable attorneys’ fees and costs, treble damages for any harm caused by the defamation action, and punitive damages.
9. Fast food workers have increased wage and hour protections under a pair of fast food industry laws.
- The minimum wage for fast food workers will increase to $20 per hour.
On September 28, 2023, Governor Newsom signed into law AB1228, which will establish a statewide minimum wage for covered fast food workers of $20 per hour effective April 1, 2024. The law applies to limited-service restaurants consisting of more than 60 establishments nationally that share a common brand and are primarily engaged in providing food and beverages for immediate consumption on or off premises where patrons must order and pay before consuming, with limited or no table service. The law exempts pre-existing bakeries and restaurants located within grocery stores that are staffed by the grocery store’s employees.
Beginning January 1, 2025, the Fast Food Council (“Council”), established under the law, could increase the minimum wage on an annual basis by no more than the lesser of either 3.5% or the annual rate of inflation in the Consumer Price Index. Additionally, the Council may establish regional minimum wages or set a statewide increase. A collective bargaining agreement could supersede the law if the agreement expressly provides for the wages, hours of work, and working conditions of the employees, and a regular hourly rate of not less than 30% more than the state minimum wage or $20 per hour as of April 1, 2024, and if the agreement provides equivalent or greater protection than the standards established by the Council. The Council cannot create new paid time off benefits or create rules regarding predictable scheduling. The law will expire in 2029 unless future legislation is enacted to extend it.
- The cost-related burden of obtaining a food handler card will shift from the employee to the employer.
On October 8, 2023, Governor Newsom signed into law SB476, amending the Health and Safety Code, which requires certain workers to obtain a food handler card within 30 days of hire. Currently, employees bear the cost-related burdens of obtaining the card, including the time taken to complete the training and examination. Beginning January 1, 2024, the law will require employers to compensate employees for the time and cost associated with obtaining a food handler card. Specifically, the employer must consider the time it takes for an employee to complete the training and examination as compensable “hours worked,” for which the employer must pay.
The employer also must pay the employee for any necessary expenditures or losses associated with obtaining the food handler card, including costs for the training and examination. Additionally, while the employee is completing the training and examination, employers are required to relieve the employee from all other work duties and compensate them for this time at their hourly rate. The law prohibits employers from conditioning employment on the applicant or employee having an existing food handler card.
10. Trial court proceedings are no longer automatically stayed pending appeal on arbitrability.
On October 10, 2023, Governor Newsom signed into law SB365, which amends the California Code of Civil Procedure to eliminate automatic stays in trial court proceedings pending an appeal of an order dismissing or denying a petition to compel arbitration effective January 1, 2024. The law effectively provides trial court judges with the discretion to continue proceedings even while an appeal regarding arbitrability is ongoing. Notably, this law conflicts with a recent U.S. Supreme Court decision in which the Court held that a district court must stay pre-trial and trial proceedings pending an appeal on arbitrability and a Ninth Circuit decision that struck down a California law prohibiting mandatory arbitration agreements in employment contracts on the basis that the bill was preempted by the Federal Arbitration Act. We will be monitoring for a similar challenge to this law.