New California Labor Laws Take Effect on January 1st, 2023

California has passed a number of new employment laws this year. These new laws, which go into effect on January 1^st, 2023, are expected to have a significant impact on employers operating in California. Below is a brief overview of the most notable new laws affecting California businesses.

Pay Scale Disclosures (SB 1162)

• California law currently requires employers to provide job applicants with pay scale information upon the job applicant’s request.
• Starting January 1st, employers will also have to provide this information to employees, upon their request, for the position that they are currently working.
• The law defines “pay scale” as the “salary or hourly wage range that the employer reasonably expects to pay for the position.”
• Employers with 15 or more employees must also include the pay scale information for a position in any job posting.
• If an employer uses a third party to “announce, post, publish or otherwise make known a job posting,” the employer must provide the pay scale to the third party, who must include it in the job posting.
• An individual that claims to be aggrieved by a violation of the law can file a claim with the Labor Commissioner or a civil action, which could result in penalties, or any other relief a court deems appropriate.
• The Labor Commissioner can assess penalties ranging from $100 to $10,000 for each violation of this law.

Prepare pay scales for all job classifications, and be prepared to post pay scale information in job postings if you employ 15 or more employees.

Family and Medical Leave (AB 1041)

• The California Family Rights Act (CFRA) provides 12 weeks of unpaid time off to employees for family and medical leave, to care for themselves or a family member with a serious health condition. A family member currently includes a spouse, domestic partner, child, parent, parent-in-law, grandparent, grandchild, and sibling.
• Starting January 1^st the definition of a family member is being expanded to include a “designated person.” A designated person 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 the leave.
• The employer can limit employees to one designated person per 12-month period.

Family and medical leave policies and the required CFRA notices and forms should be updated accordingly.

Paid sick leave (AB 1041)

• Employers must currently provide at least 3 days, or 24 hours, of paid sick leave to employees.
• Employees can take paid sick time to care for themselves or for a family member. A family member currently includes a child, parent, legal guardian, spouse, registered domestic partner, grandparent, grandchild, and sibling.
• For 2023, the definition of family member is being updated to include a “designated person.”
• A designated person means a person identified by the employee at the time the employee requests paid sick days.
• This definition is much broader than the definition under the CFRA. The designated person can be anyone the employee chooses.
• The employer can limit employees to one designated person per 12-month period for paid sick days.

Sick leave policies should be updated accordingly.

Bereavement leave (AB 1949)

• There is currently no obligation to provide employees with bereavement leave, but that will change on January 1^st.
• Employees who have completed 30 days of employment will be eligible to take up to five days of bereavement leave upon the death of a family member.
• A “family member” means a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law.
• The days of bereavement leave don’t have to be consecutive.
• The bereavement leave must be completed within three months of the date of death of the family member.
• Bereavement leave is unpaid. Employers can choose to pay for the time off, but there is no legal obligation to do so.
• If it is unpaid, employees must be permitted to choose to use vacation, paid time off or sick leave.
• The employer has the right to request documentation establishing the death of the family member. This can include a death certificate, a published obituary, or some other type of written verification of death, burial, or memorial services.
• The Company must maintain the confidentiality of any employee requesting bereavement leave.

Employee handbook sections on leave policies should be updated accordingly.

Fair Employment and Housing Act (SB 523)

• California currently prohibits workplace harassment and discrimination against employees on the basis of race, religion, color, national origin, ancestry, physical or mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, and veteran or military status.
• Starting January 1st, an additional class will be added to the list, which is based on “reproductive health decision-making.”
• Reproductive health decision-making is defined as a decision to use or access a particular drug, device, product, or medical service for reproductive health.

Update your workplace policies on equal employment opportunity, discrimination and harassment accordingly.

Workplace Safety (SB 1044)

• It will now be illegal for an employer to take any adverse action against an employee who refuses to report to work, or leaves work because they feel unsafe during an “emergency condition”
• The law provides two definitions of “emergency condition”: (i) 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; and (ii) an order to evacuate a workplace, a worksite, a 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.
• As long as the employee has a “reasonable belief” that the workplace is unsafe during an emergency condition, the employer cannot take any action against the employee for refusing to report to work, or for leaving the workplace.
• The “reasonable belief” means that a reasonable person would conclude there is a real danger of death or serious injury if that person enters or remains on the premises.

Update your workplace safety policies accordingly.

COVID-19 Notice of Exposure (AB 2693)

• Current law requires employers to provide written notice to their employees when there is a potential Covid exposure at the worksite.
• Under the new update, an employer can satisfy the notice requirements by prominently displaying a notice of the potential exposure in the workplace in a place where workplace notices are usually posted.
• The notice must contain the dates on which the Covid case was at the worksite, and the location of the exposures, including the department, floor, building, or other area.
• The notice must remain posted for 15 days.
• Employers must keep a log of all the dates the notice was posted at each worksite.
• Employers do not have to post this if they continue to instead notify employees in writing, such as by email or text message.

If you will choose to notify employees of a potential COVID-19 exposure by this method, prepare your notification template to post wherever you normally post workplace notices.

Employee Arbitration Agreements

• On March 3, 2022, President Biden signed HR 4445, the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021,” into law. Effective immediately, the law amends the Federal Arbitration Act (FAA) to prohibit the enforcement of any arbitration agreement relating to sexual assault or sexual harassment disputes brought under federal, tribal, or state law if the alleged victim chooses to file their claim in court. The law gives alleged victims the choice to pursue these disputes in court regardless of whether they signed an arbitration agreement.
• On June 15, 2022, the United States Supreme Court held that employers could use an arbitration agreement to force a lawsuit brought under California’s Private Attorneys General Act (PAGA) to head to arbitration rather than the court system. Up until this decision, properly drafted arbitration agreements in California had to exclude PAGA claims.

California employers should revise their arbitration agreements to comply with HR 4445 and take advantage of the Supreme Court’s ruling. Those employers without arbitration agreements may want to reassess whether to roll out an arbitration agreement in order to take advantage of this ruling.

Increases to Minimum Wage and Minimum Exempt Salary Threshold

• On January 1^st, the minimum wage will increase for all California employers, regardless of size, to $15.50.
• Under California law, the most common exemptions require employees to earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment, and the salary must be a pre-determined sum.
• Once the minimum wage increases on January 1^st, this means an employee must be paid a salary of at least $64,480 in order to be properly classified as exempt (on top of meeting other requirements of the exemption tests).
• If the employee receives less than this salary, this means they are non-exempt, and you must record their work hours, provide meal/rest breaks, pay overtime, and provide hourly rates on their pay stub.
• The legal liability for getting this wrong can be quite extensive even for just one employee.

Get ready to increase your employees making minimum wage, to $15.50 on January 1^st. If your exempt employees currently make under $64,480, make sure to increase them by January 1^st. Otherwise, you will need to reclassify them as a non-exempt hourly employee.

If you have questions about any of these laws and how they impact your business, send an email to kevin@riveraemploymentlaw.com or call (323) 546-4160.