The new year brings a host of new labor and employment law obligations for employers. Below is a summary of those we believe to be most relevant to our clients, including:
- Minimum & Exempt Pay Increase
- Wage Transparency
- Expanded CFRA and PSL
- COVID
- The new name for the Department of Fair Employment and Housing (“DFEH”)
- Marijuana
- PAGA waivers in arbitration agreements
- And more!
While we have not covered all new workplace laws, we are always available to provide guidance for issues specific to your business. The laws below become effective January 1, 2023, unless otherwise noted.
WAGE AND HOUR COMPENSATION
Minimum Wage Increase: The California minimum wage increases to $15.50 per hour for all employers, regardless of size. In addition, many cities and local governments in California have enacted minimum wage ordinances exceeding the state minimum wage.
Exempt Employees – Minimum Salary Threshold Increase: Because exempt employees must be paid at least twice the state minimum wage, the 2023 minimum exempt salary is $64,480. This amount will be higher where a local ordinance provides for a higher minimum wage than the California state minimum wage.
For computer software professionals, the minimum monthly and annual salary exemptions increase to $9,338.78 and $112,065.20, respectively. Exemptions for other classes of employees can be found through the California Department of Industrial Relations website: www.dir.ca.gov.
Senate Bill 1162 – Pay Transparency Law:
Pay Scale Disclosures in Job Postings: SB 1162requires employers with 15 or more employees to disclose pay scales for a position in any job posting and requires employers to maintain records of job titles and wage rate history for each employee for the duration of employment plus three years
Pay Data Reporting Requirement: SB 1162 also sets new pay data reporting requirements based on protected characteristics, changes the date for submitting pay data reports, and establishes significant civil penalties for non-compliance. This bill amends Section 12999 of the Government Code and Section 432.3 of the Labor Code.
SB 954 – Wages and Payroll Records for Public Works Employees: Existing law requires that contractors and subcontractors furnish the Labor Commissioner with payroll records concerning public works projects, which include construction, alteration, demolition, installation or repair work done under contract and paid for, in whole or in part, out of public funds. SB 954 requires that the Department of Industrial Relations establish an online database of electronic certified payroll records, accessible to certain trust funds and committees established under federal law. SB 954 requires that the online database contain only nonredacted information that may be provided to those trust funds and committees. This bill amends section 1771.4 of the Labor Code.
COVID-RELATED LAWS
AB 2693 – COVID-19 Exposure: Existing law requires employers to provide notice to the local public health agency in the event of a COVID-19 outbreak. AB 2693provides that employers no longer have to provide such notice. The California Department of Public Health will also no longer be required to post workplace information received from local public health departments about COVID-19 cases and outbreaks. Existing law also requires that an employer who receives a notice of potential exposure to COVID-19, the employer is required to provide written notice to employees within one business day of the notice of potential exposure. AB 2693 authorizes an employer to either provide written notification or instead prominently post a notice in all places where workplace notices are customarily posted for 15 days. It also requires an employer to keep a log of all the dates the notice was posted and to allow the Labor Commissioner to access those records. This bill extends these provisions until January 1, 2024. This bill amends Sections 6325 and 6409.6 of the Labor Code.
SB 1159 – COVID-19 Workers Compensation “Disputable Presumption” of Workplace Exposure Extended: Existing law creates a “disputable presumption” of industrial injury for an employee who tests positive for COVID within 14 days of work. The positive test my occur between July 6, 2020 and January 1, 2023. SB 1159 extents the presumption to January 1, 2024.
LEAVES OF ABSENCE
AB 1041 – CFRA & PSL Expanded Leave to Care for a “Designated Person:” Under the California Family Rights Act (“CFRA”), an employer with five or more employees must provide eligible employees who meet specified requirements to take up to 12 workweeks in any 12-month period for family care and medical leave. AB 1041amends the CFRA and expands the class of people for whom an employee may take leave to care for under the CFRA to include a “designated person.” Under the new law, a “designated person” means “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” The employee may identify the designated person when the employee requests leave. The employer may limit the employee to one designated person per 12-month period.
AB 1041 also expands the definition of family member under the Healthy Workplaces, Healthy Families Act of 2014 (i.e., California Paid Sick Leave) to include a “designated person.” Similar to the CFRA, for Paid Sick Leave, the employee may identify the designated person when the employee requests paid sick days and the employer may limit an employee to one designated person per 12-month period. This bill amends Section 12945.2 of the Government Code and Section 245.5 of the Labor Code.
AB 1949 – Mandatory Unpaid Bereavement Leave: AB 1949amends the CFRA (and therefore applies to employers with five or more employees) and provides that eligible employees who have been employed for at least 30 days may take up to five days of unpaid leave (subject to an employee’s ability to use available paid time off) related to the death of a family member. Family member means a spouse or a child, parent, sibling, grandparent, grandchild, domestic partner or parent-in-law (same as CFRA). Under this bill, bereavement leave need not be taken in consecutive days, but must be completed within three months of the date of the family member’s death. Further, within 30 days of the first day of the leave, the employer may request that the employee provide documentation of the death of the family member. “Documentation” includes, but is not limited to, a death certificate, a published obituary or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution or governmental agency. The employer must maintain the confidentiality of any employee requesting bereavement leave and any documentation the employee provides to the employer must be maintained as confidential and shall not be disclosed except to internal personnel or counsel, as necessary, or as required by law. In addition, to the extent an employer has an existing bereavement policy, the bereavement leave must be taken pursuant to the employer’s existing bereavement leave policy. Bereavement leave may be unpaid if the employer does not have an existing paid bereavement leave policy, or has an unpaid bereavement leave policy of less than five days. However, the employee may use vacation, personal leave, accrued and available sick leave or compensatory time off that is otherwise available to the employee. If the employer’s existing leave policy provides for less than five days of paid bereavement leave, the employee is entitled to additional unpaid days of unpaid leave to bring the employee to five days total. Again, the employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee. Under AB 1949, bereavement leave may be taken intermittently, and an employee’s right to bereavement leave is in addition to other rights employees have under the CFRA. Finally, the bill exempts employees subject to a collective bargaining agreement if certain conditions are met. This bill amends Section 12945.21 and 19859.3 of, and adds Section 12945.7 to, the Government Code.
SB 1044 – Workers’ Rights in Emergencies: SB 1044 allows employees to leave work, or refuse to show up for work within an area affected by an emergency condition because the employee has a reasonable belief that the workplace or worksite is unsafe, regardless of existing health and safety standards, or whether the employer has provided health and safety protections. The bill prevents employers from taking or threatening adverse action against any employee for doing so. SB 1044 requires employees to notify their employers, when feasible, of the emergency condition requiring the employee to leave or refuse to report to the workplace or worksite prior to leaving or refusing to report, or when not feasible, as soon as possible. An “emergency condition,” means either “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” or “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.” An “emergency condition” does not include a health pandemic. “A reasonable belief that the workplace or worksite is unsafe” means that a reasonable person, under the circumstances known to the employee at the time, would conclude there is a real danger of death or serious injury if that person enters or remains on the premises. SB 1044 also prohibits employers from preventing any employee from accessing the employee’s mobile device or other communications device for seeking emergency assistance, assessing the safety of the situation, or communicating with a person to verify their safety during an emergency condition. SB 1044 does not apply when emergency conditions that pose an imminent and ongoing risk of harm to the workplace, the worksite, the worker, or the worker’s home have ceased.
EEO LAWS
SB 189 – DFEH Renamed to CRD (effective July 1, 2022): Pursuant to SB 189,the Department of Fair Employment and Housing (DFEH) is now the “Civil Rights Department” (“CRD”). As stated on the CRD’s website, this change is to more accurately reflect the CRD’s powers and duties, which include enforcement of laws prohibiting hate violence, human trafficking, discrimination in business establishments, and discrimination in government-funded programs and activities, among others. The Fair Employment and Housing Council’s name has also changed to the California Civil Rights Council.
AB 2188 – Off-Duty Use of Cannabis (Marijuana) (effective Jan. 1, 2024): AB 2188amends the Fair Employment and Housing Act (“FEHA”) to make it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment based on: 1) the person’s use of cannabis off the job and away from the workplace; or 2) an employer-required drug test that has found the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids. This bill allows exceptions for preemployment drug screening that does not screen for non-psychoactive cannabis metabolites. Certain employees and applicants are also exempt, including those in the building and construction trades and those whose positions require a federal background investigation or clearance. AB 2188 specifically provides that “[n]othing in this section permits an employee to possess, to be impaired by, or to use, cannabis on the job.” Further, this bill provides that it does not “affect the rights or obligations of an employer to maintain a drug- and alcohol-free workplace […] or any other rights or obligations of an employer specified by federal law or regulation.” This bill amends Section 12954 to the Government Code.
AB 2282 – Discrimination & Harassment Hate Crimes: AB 2282 expands the definition of hate crimes in places of employment to include display of hate imagery.
AB 2960 – Civil Procedure: AB 2960 amends the FEHA to toll right-to-sue notice deadlines during mandatory or voluntary dispute resolution proceedings.
AB 2777 – Sexual Assault: Statute of Limitations: Under existing law, the statute of limitations to commence a civil action for sexual assault is 10 years from thelast act, attempted act, or assault with the intent to commit an act of sexual assault; or within three years from the date a plaintiff discovers or reasonably should have discovered that an injury or illness resulted from those acts, and applies to any action commenced on or after January 1, 2019. AB 2777, the Sexual Abuse and Cover Up Accountability Act, provides that actions commenced on or after January 1, 2019 and based on conduct that occurred on or after January 1, 2009, will not be time-barred, even if the 10-year statute of limitations has expired, provided that such claims are commenced by December 31, 2026. The act does not revive claims in which there has been, prior to January 1, 2023, a final decision by a court or a written settlement. AB 2777 also provides that where a party seeks to recover damages based on a sexual assault “covered up” by an entity, the action may be commenced between January 1 and December 31, 2023, even if that claim would otherwise be time-barred. “Cover up” means “a concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent or prevents information relating to a sexual assault from becoming public or being disclosed to the plaintiff, including, but not limited to, the use of nondisclosure agreements or confidentiality agreements.” This bill amends Section 340.16 of the Code of Civil Procedure.
PRIVACY
The California Privacy Rights and Enforcement Act (“CPRA”) amends the prior California Consumer Privacy Act (“CCPA”). Unless the legislature or Governor Gavin Newsom acts prior to January 1, 2023, the CPRA eliminates employer exemptions in the CCPA applicable to employee/applicant data and expands on several areas of the CCPA, and creates several new privacy-related obligations for employers, including:
(1) notifying applicants, employees and contractors about the categories of personal information that is or may be collected by the employer, and describing the purpose(s) for the collection and disclosure of such information, and providing information regarding the sharing and retention of personal information;
(2) employees’ rights to access or restrict the use or disclosure of certain categories of personal information;
(3) employees’ rights to correct or delete personal information (subject to statutory exemptions that may apply); and
(4) employees’ rights to request the personal information that has been collected about them during the preceding 12 months.
The CPRA also establishes a new agency, the California Privacy Protection Agency, which is responsible for implementing and enforcing the law, including issuing potential fines of $2,500 per violation and $7,500 per intentional violation. Although the CPRA takes effect on January 1, 2023, any personal information about employees collected by employers dating back to January 1, 2022 will be subject to compliance with the CPRA.
AB 2223 – Employer Liability – Reproductive Health: AB 2223 provides immunity for exercising reproductive rights. It prohibits a person from being subject to civil or criminal liability based on their actions or omissions with respect to their pregnancy or actual, potential, or alleged pregnancy outcome or based on their actions to aid or assist a woman or pregnant person who is exercising their reproductive rights.
SB 731 – Background Checks – Felonies: SB 731 seals records of defendants convicted of most felonies on or after January 1, 2005, if they completed their sentence, probation, supervision, parole and any other terms of their conviction, and are not convicted of a new felony for four years.
AB 1720 – Background Checks – Home Health Services: AB 1720 removes requirement for specified individuals connected with home healthcare facilities to sign a declaration regarding prior criminal convictions.
AB 984 – Privacy – GPS Surveillance: AB 984 requires disclosure regarding use of GPS tracking location technology in fleet vehicles. It allows an employee to disable GPS tracking off hours.
MISCELLANEOUS
AB 2183 –Agricultural Workers – Vote by Mail: AB 2183 allows agricultural works to vote by mail in union representation elections that were previously required to be held in person.
SB 523 – Contraceptive Equity: SB 523 adds to FEHA a new protected category: “reproductive health decision-making,” defined as: “a decision to use or access a particular drug, device, product, or medical service for reproductive health.”
CASE LAW
Viking River Cruises – Arbitration Agreements – PAGA Waivers (USSC, June 2022): In June 2022, the United States Supreme Court (“USSC”) issued its decision in Viking River Cruises. This decision is employer-friendly, as it basically allows employers to utilize a properly drafted arbitration agreement to reduce or stop Private Attorneys General Act (PAGA) representative suits in California. Previously, California employers could provide workplace arbitration agreements requiring that employees waive any class action claims (i.e., claims brought on behalf of other employees), and only bring their employment claims on an individual basis, in arbitration. However, this waiver did not apply to PAGA representative actions, meaning that employees signed to arbitration agreements could nevertheless bring PAGA representative actions, in court, on behalf of themselves and as representative of other “aggrieved employees.” Because PAGA provides for stacking civil penalties for Labor Code violations, liability for such claims could easily be in the seven-figures, even for smaller employers. The high court’s decision in Viking River Cruises finally provided some relief for California employers to the extent it allows their arbitration agreements to include carefully crafted, fully enforceable waivers of PAGA representative actions.
The attorneys at Duggan McHugh are available to help employers with any questions or compliance concerns they have relating to employment law.