It’s that spooky time of year again for California employers – Governor Newsom has spoken but, fear not, we have narrowed it down. Whether you’re an employer who eagerly awaits the annual list or one who dreads its return, all employers should be aware of these significant new employment laws heading to the Golden State. To prepare for this legislative onslaught, take some time to review these highlights of the top ten laws to make the cut and a few that, surprisingly, fell short.
SB399: Prohibits Captive Audience Meetings
On September 27, Governor Newsom signed into law SB399, referred to as the “California Worker Freedom from Employer Intimidation Act,” making California the latest of several states to ban so-called “captive audience” meetings. Effective January 1, 2025, the law prohibits employers from taking or threatening to take adverse employment action against an employee who declines to attend an employer-sponsored meeting regarding the employer’s opinion on religious or political matters, including those related to labor organization. If an employee declines to attend the meeting, the law requires employers to continue to pay the employee while the meeting is held. Employers who violate the law are subject to a civil penalty of $500 per employee for each violation, temporary and preliminary injunctive relief, and punitive damages.
The law provides exemptions for certain types of employers, including religious organizations, political organizations or parties, certain non-profits, educational institutions lecturing on political or religious matters as part of the coursework, employers providing training to employees as legally required under civil rights laws and occupational safety and health laws, and public employers holding a new employee orientation.
SB988: Enacts “Freelance Worker Protection Act”
On September 28, Governor Newsom signed into law SB988, known as the “Freelance Worker Protection Act,” which imposes minimum requirements related to contracts between a hiring party and freelance worker. The law defines “freelance workers” as a person or organization composed of no more than one person that is hired or retained as a bona fide independent contractor by a hiring party to provide professional services for an amount equal to or greater than $250, either in a single contract or when aggregated with all service contracts during the immediately preceding 120 days.
With the exception of government and municipal entities, and individuals hiring services for the personal benefit of themselves or family, any person who retains a freelance worker to provide professional services (the “hiring party”) must provide the freelance worker with a physical or electronic copy of a written agreement – which the hiring party must retain for at least four years – to include, at a minimum, the following information:
- Name and mailing address of each party;
- An itemized list of services to be provided, including the value of the services, and the rate and method of compensation;
- The date by which the hiring party must pay the compensation or the mechanism by which the date will be determined; and
- The date by which the freelance worker must submit to the hiring party a list of services rendered to meet internal processing deadlines to ensure timely payment of compensation.
The law requires hiring parties to pay the freelance worker for services on or before the contractual payment due date. If no date is specified, the hiring party must pay the freelance worker no later than 30 days after the completion of services. Once the freelance worker has commenced performance of services, the law prohibits a hiring party from requiring the freelance worker to (1) accept less compensation than the contractual amount as a condition of timely payment, or (2) provide more goods or services than agreed upon in the contract.
The law prohibits a hiring party from discriminating or taking adverse action against a freelance worker for exercising or enforcing their rights under this law. Freelance workers alleging violations of the law may file a civil action and, if successful, may recover attorney’s fees and costs, injunctive relief, damages, and other remedies deemed appropriate by the court. The law takes effect January 1, 2025 and applies to contracts entered into or renewed on or after that date.
AB2499: Expands Workplace Protections for Victims of Violence
On September 29, Governor Newsom signed into law AB2499, which revises California’s “jury, court, and victim time off” law to significantly expand workplace protections for victims of violence. The law, effective January 1, 2025, broadens eligibility and qualifying reasons to take victim time off; permits employees to use paid time off during the leave, including vacation or sick leave; expands eligibility for reasonable accommodations; and lowers the 25-employee threshold for certain victim-related provisions. The law also transfers and recasts the “time off” protections – currently housed under the Labor Code – as unlawful employment practices within the California Fair Employment and Housing Act (“FEHA”). As a result, the law will be enforced by the Civil Rights Department (“CRD”) which, effectively, will allow aggrieved employees to bring civil actions in court. For additional information on this complex law, see our prior eAlert HERE.
AB2123: Prohibits Mandatory Use of Vacation Before Receiving State Paid Family Leave Benefits On September 29, Governor Newsom signed into law AB2123, which makes it unlawful for an employer to require an employee to take up to two weeks of accrued vacation leave before, and as a condition of, the employee’s initial receipt of benefits under California’s Paid Family Leave Program during any 12-month period in which employees are eligible for the benefits. The law takes effect on January 1, 2025.
SB1100: Prohibits Discrimination on the Basis of Possessing a Driver’s License
On September 28, Governor Newsom signed into law SB1100, which addresses discrimination against individuals on the basis of possessing a driver’s license by eliminating such a requirement unless certain conditions are satisfied. Effective January 1, 2025, the law prohibits employers from including statements in job advertisements, postings, applications, or other materials that an applicant must have a driver’s license, unless (1) the employer reasonably expects driving to be a job function for the position, or (2) the employer reasonably believes that using an alternative form of transportation would not be comparable in travel time or cost to the employer. The law defines “alternative form of transportation” to include without limitation ride-hailing services, taxis, carpooling, bicycling, or walking.
AB3234: Imposes Reporting Obligations for Voluntary “Social Compliance Audits”
On September 22, Governor Newsom signed into law AB3234, which would impose reporting obligations on businesses that voluntarily conduct “social compliance audits.” Effective January 1, 2025, employers that choose to conduct “social compliance audits” must post a clear and conspicuous link on its website to report detailed findings of its compliance with child labor laws. The law defines a “social compliance audit” as a voluntary, nongovernmental inspection or assessment of an employer’s operations or practices to evaluate whether it is compliant with state and federal labor laws, including regulations related to wage and hour, health and safety, and child labor. The report must include whether the employer engaged in or supported the use of child labor and a copy of any past or present written policies and procedures regarding child employees.
SB1340: Authorizes Local Enforcement of Workplace Discrimination Laws
On September 28, Governor Newsom signed into law SB1340, which authorizes local jurisdictions to enact and enforce local employment discrimination laws, so long as the following four requirements are met:
- Local enforcement concerns an employment complaint filed with the CRD;
- Local enforcement occurs after the CRD has issued a right-to-sue notice;
- Local enforcement commences before the expiration of the time to file a civil action specified in the right-to-sue notice; and
- Local enforcement is pursuant to a local law that is at least as protective as state law.
The law also tolls the time by which a civil action must be filed under the right-to-sue notice during local enforcement; however, individuals may still file an action during local enforcement.
SB1137: Clarifies Protections Against Discrimination Based on Two or More Protected Traits
On September 27, Governor Newsom signed into law SB1137, making California the first state to explicitly recognize the concept of intersectionality in state anti-discrimination laws. The law, effective January 1, 2025, amends the Unruh Civil Rights Act and FEHA to (1) revise the definitions of unlawful discrimination to include discrimination based on any combination of characteristics protected under each respective law, and (2) provide effective remedies for discrimination based on the combination of two or more protected bases. For additional information on the concept of “intersectional” discrimination, see our prior eAlert HERE.
AB1034: Extends PAGA Exemption for Construction Industry Employers
As we previously reported HERE, in July 2024, Governor Newsom signed into law AB2288 and SB92, significantly reforming the California Private Attorneys General Act (“PAGA”). On September 28, the Governor signed into law AB1034, a follow-up measure that extends the expiration of a PAGA exemption for certain construction industry employees until January 1, 2038.
The extension applies to employees in the construction industry covered by a collective bargaining agreement (“CBA”) that provides (1) the wages, hours of work, and working conditions of employees; (2) the premium wage rate for all overtime hours worked; and (3) for the employee to receive a regular hourly pay rate of not less than 30% more than the state minimum wage rate.
The CBA must also (1) prohibit violations of the labor code that are redressable under PAGA and provide for a grievance and binding arbitration procedure to redress those violations; (2) expressly waive the PAGA requirements in clear and unambiguous terms; and (3) authorize the arbitrator to award any and all remedies available under the labor code, except penalty awards payable to the Labor and Workforce Development Agency.
AB1815: Amends the Definitions of “Race” and “Protective Hairstyles” Under the CROWN Act
Back in 2019, California became the first state to enact the “Creating a Respectful and Open World for Natural Hair Act” (“CROWN Act”), banning workplace and school grooming policies that restrict the natural presentation of Black hair by extending statutory protections to hair texture and protective styles under FEHA. On September 26, Governor Newsom signed into law AB1815, amending the CROWN Act’s definitions of “race” and “protective hairstyles” to clarify that “race” is inclusive of traits associated with race, including without limitation, hair texture and “protective hairstyles.” The amendment further clarifies that “protective hairstyles” include, but are not limited to, braids, locs, and twists. The amendments apply retroactively as a declaration of existing law.
SIGNIFICANT VETOES
AB2930: Regulated Employers’ Use of Automated Decision Tools
On September 29, Governor Newsom vetoed AB2930, which would have regulated the use of artificial intelligence (“AI”) in the hiring and screening process. The legislation would have prohibited employers from using an automated decision tool (“ADT”) to make “consequential decisions” in a manner that results in “algorithmic discrimination.” Employers also would have been required to provide advance notice to inform individuals of the use of an ADT to make consequential decisions, provide accommodations upon request for an alternative selection process, conduct annual impact assessments, and establish a governance program to manage risks of algorithmic discrimination associated with ADT use.
SB1047: Regulated the Development of Large AI Models
On September 29, Governor Newsom vetoed landmark AI bill SB1047, also known as the “Safe and Secure Innovation for Frontier Artificial Intelligence Models Act,” which aimed to regulate the development of large AI models by imposing onerous obligations on companies that develop or train such models, including rigorous testing prior to launch, compliance with detailed safety protocols to prevent misuse or harm, reporting requirements for safety incidents, and implementing a kill switch to prevent critical harm. Although this bill did not directly affect employers, looming concerns surrounded its potential impact on the development, availability, and functionality of workplace AI tools upon which employers and employees rely.
SB1022: Extended the CRD’s Time to File “Group or Class Complaints” On September 29, Governor Newsom vetoed SB1022, which would have extended the statute of limitations for the CRD to bring “group or class complaints” to seven years from the date of filing. The legislation also would have tolled a complainant’s time to file a civil action during the complaint’s pendency with the CRD.
If you have any questions relating to or need assistance complying with any of these new laws, please reach out to the NFC Attorney with whom you typically work or call us at 619.292.0515.