Every new year, we celebrate with champagne, oversized eyeglasses (when did that become a thing?), and kazoos (can that not be a thing?). But more jarring than bad fashion and kazoos are the raft of new laws that California employers can expect every year and 2024 will be no different. Here is what you need to know if you are an employer with California employees:
Leaves of Absence
- California Sick Leave Law Amended (SB 616) (Effective January 1, 2024)
- Employers must increase the amount of sick leave provided to California employees from 24 hours (3 days) to 40 hours (5 days) during each year of employment, calendar year, or 12-month period. The law also increases the use limits each year to 40 hours (5 days) and increases the accrual cap to 80 hours (10 days). Employees may now carry over accrued unused sick leave up to 40 hours (5 days) from year to year.
- Railroad carrier employers and their employees are exempt from this law.
- Reproductive Loss Leave (SB 848) (Effective January 1, 2024)
- Employers with at least five (5) employees must provide up to five (5) days of reproductive loss leave to an employee who has worked at least thirty (30) days prior to taking leave. A “reproductive loss” includes a miscarriage, failed surrogacy, stillbirth, unsuccessful “assisted reproduction” (such as artificial insemination or embryo transfer), or failed adoption that is experienced by the employee, employee’s spouse or domestic partner, or any other individual if that person would have been a parent as a result of the pregnancy or adoption. Leave must be taken within three (3) months of the event, and pursuant to any existing leave policy of the employer.
- If an employee experiences more than one (1) reproductive loss event within a 12-month period, the total amount of reproductive loss leave time may not exceed twenty (20) days within a 12-month period.
- Reproductive loss leave is unpaid. However, employees can use accrued and unused vacation, paid time off, or paid sick leave while on reproductive loss leave.
- Retaliation against an employee for requesting or taking reproductive loss leave is prohibited.
Anti-Discrimination / Retaliation
- Employers’ Business-Entity Agents Can Be Held Liable For FEHA Violations
- The California Supreme Court held that an employer’s business-entity agent, including third-parties conducting pre-employment screenings on behalf of the employer, can be held liable for violations of California’s Fair Employment and Housing Act (FEHA). Raines v. United States Healthworks Med. Grp. (2023) 15 Cal.5th 268.
- Whistleblowing Is Protected Even If Report Recipient Already Knows About Alleged Wrongdoing
- The California Supreme Court held that the state’s whistleblower statutes shield workers from retaliation for disclosing wrongdoing even if the report recipient already knows about the alleged wrongdoing. People ex rel. Garcia-Brower v. Kolla's, Inc. (2023) 14 Cal.5th 719.
Off-Duty Cannabis Use
- Prohibition on Discrimination Based on Off-Duty Marijuana Use (AB 2188) (Effective January 1, 2024)
- Employers are prohibited from discriminating against an applicant or employee based on: (1) the applicant or employee’s off-duty and off-premises cannabis use; or (2) a drug screening test result that is positive for non-psychoactive cannabis metabolites in the applicant’s or employee’s hair, blood, urine, or other bodily fluids.
- The bill would exempt certain applicants and employees, including: (1) employees in the building and construction trades; and (2) employees in positions requiring federal background investigation or clearance.
- This law does not preempt other state or federal laws requiring applicants and employees to be tested for controlled substances as a condition of employment, receiving federal funding or federal licensing-related benefits, or entering into a federal contract.
- Prohibition on Discrimination For Applicant’s Prior Cannabis Use Learned From Criminal History (SB 700) (Effective January 1, 2024)
- Employers are prohibited from requesting information from an applicant relating to the applicant’s prior use of cannabis, with certain exceptions.
- Employers can ask applicants about prior use of cannabis if the information about the prior use is obtained from an applicant’s criminal history if the employer is permitted to consider or inquire about that information under a specified provision of the California Fair Employment and Housing Act (FEHA) or other state or federal law.
- Employees still are not permitted to possess, to be impaired by, or to use cannabis on the job, and employers can still require employees to abide by drug- and alcohol-free workplace policies.
Wage and Hour Compliance
- Non-Individual PAGA Claims Can Remain in Court
- On July 17, 2023, the California Supreme Court held that representative (non-individual) PAGA claims can remain in court even when individual claims are sent to arbitration. Adolph v. Uber Techs., Inc. (2023) 14 Cal.5th 1104.
- No Mandatory Stay When Courts Refuse To Compel Arbitration (SB 365) (Effective January 1, 2024)
- Trial courts can now decide whether to allow plaintiffs to continue pursuing claims while an appeal is pending challenging an order denying a petition to compel arbitration. A stay was previously mandatory.
- All New Hire Documents Can Be Considered When Determining Whether an Arbitration Agreement is Unconscionable
- On April 19, 2023, the California Court of Appeals issued a decision ruling that all new hire documents may be reviewed when determining whether an arbitration agreement is unconscionable. Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482. This is important because an employer’s failure to update new hire documents to reflect new laws can lead to claims of unconscionability.
- Fast Food Franchisor Responsibility Act (AB 1228) (Effective April 1, 2024)
- California employees working at fast food restaurants that have more than 60 locations nationwide must be compensated a minimum wage of $20.00 per hour. On January 1 of each year, the minimum wage for fast food workers will increase.
- Employers Liable For Expenses For WFH Employees
- California Labor Code § 2802 requires employers to pay for business expenses incurred by California employees. On July 11, 2023, the California First District Court of Appeals held that an employer is liable under § 2802 for expenses incurred by employees required to work from home, even when government COVID-19 mandates required the remote work arrangements. Thai v. Int'l Bus. Machs. Corp. (2023) 93 Cal.App.5th 364.
Noncompete Agreements
- SB 699 (Effective January 1, 2024)
- Existing law states that employers’ noncompete agreements with employees are void and unenforceable under California law. SB 699 clarifies that employee noncompete agreements are prohibited, and such agreements are void and unenforceable regardless of where and when the agreement was signed. In other words, if an employee who lives in another state, works in that other state, and receives benefits in exchange for agreeing to a restrictive covenant enforceable in that state relocates to California, their agreement would be void and unenforceable. SB 699 further provides that employees can now bring a private action for injunctive relief or actual damages and can recover attorneys’ fees and costs if they prevail in court.
- AB 1076 (Effective January 1, 2024)
- It is unlawful to include a noncompete clause in an employment contract, or to require an employee to enter into a noncompete contract, no matter how narrowly tailored it is, with only limited specified exceptions. Employers who violate these prohibitions engage in unfair competition under the state’s Unfair Competition Law.
- This state law imposes an affirmative obligation on employers to notify California employees no later than Valentine’s Day regarding any void noncompetes. Noncompetes are void unless they meet very limited statutory exceptions. Employers must notify (i) current employees; and (ii) former employees employed after January 1, 2022 if they signed any noncompete agreement or noncompete agreement that is void. This law requires individualized notices to each affected current or former employee sent by February 14, 2024.
Workplace Violence
- Workplace Violence Prevention Plans and Restraining Orders (SB 553) (Effective July 1, 2024 and January 1, 2025)
- Beginning July 1, 2024, employers will be required to establish, implement, and maintain an effective workplace violence prevention plan, record each incident in a log, provide training to employees, and retain training and incident records.
- Beginning January 1, 2025, a collective bargaining or union representative of an employee can seek a temporary restraining order and an order after hearing on behalf of that employee and other employees at the workplace if that employee has suffered unlawful violence or a credible threat of violence from any individual.
Wage Theft Notices
- New Wage Theft Prevention Notices
- The California Labor Commissioner has updated its Wage Theft Prevention Notice template to include an Emergency or Disaster Disclosure section. The template also updates the paid sick leave section to mirror increased entitlements.
What Should Employers Do Now?
- Prepare individualized notices to current and former employees that noncompete agreements are void to meet the February 14 deadline;
- Review new hire documents to ensure that they are compliant with new laws and to avoid claims of unconscionability;
- Make sure you are aware of new local laws in California cities that may impact your organization;
- Ensure your employee handbook policies, especially your leave of absence, discrimination, and paid sick leave policies, comply with these new California laws;
- Update your Wage Theft Prevention Notices; and
- Consult legal counsel before terminating employees for attendance reasons for absences that may qualify as excused absences under one of these new laws.
Lane Powell’s team of attorneys is here to help employers develop and implement the strategy that supports their organization and employees. For more information or assistance, contact Rishi Puri, Courtney McFate, A.C. Estacio-Heilich, or another member of our Labor, Employment & Benefits Team. Keep up-to-date by subscribing to Lane Powell’s Legal Updates. |
|