Changes Coming in 2024 – California Employment Law Update

California Employment Law Update – Changes Coming in 2024

A series of new laws that will impact employers in 2024 is just around the corner. Many of these new laws, summarized below, will require employers to revise their policies to ensure compliance.

New Laws Requiring Changes to your Employment Policies

• Employers Must Provide 5 days of Paid Sick Leave Each Year (SB 616)

SB 616 expands paid sick leave entitlements for California employees. Beginning January 1, 2024, employers must provide a minimum of 40 hours/5 days of paid sick leave, instead of 24 hours or 3 days under current law. Consistent with the current law, employers can either implement an accrual method or a front-load method.

Under the accrual method, employees continue to accrue a minimum of 1 hour of paid sick leave for every 30 hours worked. The accrual must result in no less than 24 hours or 3 days of sick leave by the 120^th day of employment and no less than 40 hours or 5 days of sick leave by the 200^th day of employment. Employers can impose a maximum accrual cap of 80 hours or 10 days and limit the use of paid sick leave to 40 hours or 5 days in a 12-month period. Employers must allow employees to carry over accrued and unused sick days, but can set a limit of 80 hours or 10 days on the carryover.

Under the front-load method, employers must provide employees 40 hours or 5 days of paid sick leave at the beginning of employment and each 12-month period thereafter. No carryover is required under the front-load method.

SB 616 also changes the sick leave requirement for providers of in-home supportive services and individual providers of waiver personal care services, to permit a front-load grant of 40 hours or 5 days of paid sick leave at the beginning of employment and each 12-month period thereafter, with no accrual or carryover.

• Employees’ Off-Duty Marijuana Use Is Protected (SB 700)

AB 2188, effect January 1, 2024, modifies the Fair Employment and Housing Act (FEHA) to prohibit discrimination against an employee based on the employee’s use of cannabis while off-the-job and away from the workplace. AB 2188 also prohibits discrimination against an employee who tests positive in an employer-required drug screening test that detects the presence of “non-psychoactive cannabis metabolites in their hair, blood, urine, other bodily fluids,” because the presence of such metabolites may indicate historical use (i.e., lawful off-duty use), as opposed to on-the-job impairment. Employers may still drug test their employees, using methods that do not screen for nonpsychoactive cannabis metabolites. For example, employers can use tests that measure the presence of THC, the principal psychoactive constituent of cannabis. Employers may still discipline employees who are “impaired by” cannabis while on-the-job, or who use or possess cannabis while on-the-job.

SB 700, also effective January 1, 2024, expands the protection of off-duty marijuana use to applicants for employment. Under SB 700, employers may not request information from an applicant for employment related to the applicant’s prior use of cannabis. Under SB 700, employers also cannot make employment decisions based on information obtained from an applicant’s or an employee’s criminal history related to cannabis use. However, employers can inquire about or consider information obtained from criminal history checks related to cannabis use if it is allowed under another state or federal law (for example, after making a conditional offer of employment under the Fair Chance Act).

SB 700 does not apply to employees in the building and construction trades, nor does it apply to employees in positions requiring federal government background investigations or security clearances through the U.S. Department of Defense.

• Employers Must Implement a Workplace Violation Prevention Plan (SB 553)

Effective July 1, 2024, SB 553 will require nearly all employers to develop and implement a Workplace Violence Prevention Plan (WVPP) as part of their already required Injury and Illness Prevention Plan (IIPP). This new law will require employers to provide effective procedures to respond to workplace violence reports, record every workplace violence incident in an incident log, provide training to employees and maintain training records, and it will impose additional obligations designed to address violence in the workplace.

Although this law will not become effective until July 2024, employers should start preparing a WVPP in advance. Also make this change on the website.

• Employers Must Provide Leave for Reproductive Loss (SB 848)

Effective January 1, 2024, SB 848 will allow an employee who has been employed by their employer for at least 30 days to take up to 5 days of unpaid leave following a “reproductive loss event.” A “reproductive loss event” is defined as the day of, or for a multiple-day event, the final day of, a failed adoption, a failed surrogacy, a miscarriage, a stillbirth, or an unsuccessful assisted reproduction.

If an employee experiences more than one reproductive loss event in a 12-month period, they are entitled to 5 days of leave per event, although the employer may limit the maximum number of days of reproductive loss leave to 20 days per 12-month period.

Employees cannot be required to take all 5 days of reproductive loss leave consecutively. Employees must complete any reproductive loss leave within 3 months of the reproductive loss event, provided however, that if an employee is on CFRA leave, FMLA leave, or any other leave to which they are entitled under state or federal law, the employer may only require the employee to complete their reproductive loss leave within 3 months of the end date of any such other leave.

Reproductive loss leave is unpaid, but employers must allow employees to use any accrued paid sick leave, vacation, or other available paid time off.

• Enforcement of Non-Compete Agreements (AB 1076 and SB 699)

Two distinct but related laws reinforce California’s disfavor of noncompete agreements – SB 699 and AB 1076.

Effective January 1, 2024, SB 699 prohibits employers from entering into or attempting to enforce noncompete agreements. California law already renders noncompete agreements void, absent certain exemptions, but SB 699 expands the ways in which employees can challenge noncompete agreements. Under SB 699, a noncompete provision is unenforceable regardless of when or where an employee signs the agreement. For example, an employee who signs a noncompete agreement in a state that allows such agreements cannot be prevented from working for a California employer based on the agreement.

AB 1076 codifies the 2008 decision in Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, by voiding noncompete agreements in employment, no matter how narrowly tailored. AB 1076 also requires employers to provide written notice by February 14, 2024 to current employees, as well as former employees who were employed after January 1, 2022, that any noncompete clause in a previously executed contract is void.

Other New Laws to Keep in Mind

• Minimum Wage Increase to $16.00

Effective January 1, 2024, California’s minimum wage will increase to $16.00 per hour for all employers, regardless of size. Keep in mind, however, that many cities and counties already require the payment of minimum wages higher than $16.00 per hour, as do some statutes regulating certain industries (such as healthcare). The following cities required a higher minimum wage beginning in July 2023:

• Los Angeles – $16.78/hour
• San Diego – $16.30/hour
• Santa Monica – $16.90/hour
• Pasadena – $16.93/hour
• San Francisco – $18.07/hour
• West Hollywood – $19.08/hour
• Berkeley – $18.07/hour
• Alameda: $16.52/hour

Workplace Violence Restraining Orders (SB 428)

Under current law, employers can seek a temporary restraining order (TRO) on behalf of an employee against an individual who has engaged in workplace violence or made credible threats of violence against the employee. Effective January 1, 2025, employers will also be able to seek TROs on behalf of an employee for harassment that does not necessarily involve violence or threats of violence. Harassment for the purposes of this law means “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.” The course of conduct must also “be that which would cause a reasonable person to suffer substantial emotional distress and must actually cause substantial emotional distress.”

• Retaliation Presumed, Unless Rebutted (SB 497)

Effective January 1, 2024, SB 497 makes it easier for employees to establish a prime facie case of retaliation. Under this new law, an employer is presumed to have retaliated against an employee if the employer disciplines or takes adverse action against an employee within 90 days of the employee filing or participating in a Labor Commissioner claim, filing or participating in a Fair Pay Act claim, engaging in lawful off duty conduct, or engaging in any other actions protected by the Labor Code. If retaliation is presumed, the employer bears the burden to articulate a legitimate, nonretaliatory reason for the alleged discipline or adverse action. Because it will be much easier for employees to establish a prima facie case of retaliation, employers are encouraged to be diligent in timely documenting performance issues and training managers to do the same. 

• No Automatic Stay of Trial Court Proceedings Pending the Appeal of a Trial Court Decision Denying a Petition to Compel Arbitration (SB 365)

Effective January 1, 2024, litigation will no longer be automatically stayed while the grant or denial of a petition to compel arbitration is on appeal. This change will be costly for employers, as they will be forced to continue to spend time and resources defending claims while they appeal a trial court’s order denying arbitration. 

• Amendments to Labor Code Section 2810.5 Notice

Under current law, Labor Code section 2810.5 requires employers to provide a wage and employment notice to newly hired employees that contains specific information in the language the employer normally uses to communicate. Effective January 1, 2024, AB 636 will also require employers to include in this notice information about federal and/or state disaster declarations applicable to the county in which the employee is employed. Beginning March 15, 2024, employers also must provide information about rights and protections under California law to temporary agricultural workers who are working in the United States pursuant to a H-2A visa.

New Laws Applicable to Specific Industries

• Recall and Retaliation Rights Extended for Hospitality and Building Service Employees (SB 723)

Under current law, SB 93 requires hospitality and building service providers to recall, in order of seniority, employees who are laid off due to COVID-19. SB 723 will extend the protections of SB 93 to December 31, 2025 and it will expand the law to include any employee of a hotel, private club, event center, airport hospitality operation, airport service provider, or business that provides building service to office, retail, or other commercial buildings, who was employed for at least 6 months and whose most recent separation of employment occurred on or after March 4, 2020. Under the new law, there is a rebuttable presumption that anyone laid off due to lack of business, reduction in force, or other economic reason is laid off because of the COVID-19 pandemic.

• Minimum Wage Increase in Fast Food Restaurants (AB 1228)

AB 1288 raises the minimum wage for national fast food restaurant employees to $20 per hour effective April 1, 2024, and it establishes the Fast Food Council, which will work to establish regulations related to working hours, other working conditions, and minimum wages beginning January 1, 2025. The law defines national fast food restaurants as limited-service restaurants consisting of more than 60 establishments nationally that share a common brand or are characterized by standardized options for decor, marketing, packaging, products, and services, and which are primarily engaged in providing food and beverages for immediate consumption on or off premises. 

• Healthcare Industry

SB 525, effective June 1, 2024, increases the minimum wage for California employees in the healthcare industry, depending on the size and type of the facility. Covered employees include physicians, nurses, caregivers, medical residents, interns, and workers who provide tangential support to healthcare facilities, including janitors, housekeeping staff, groundskeeping staff, gift shop workers, food service workers, guards, clerical workers, nonmanagerial administrative workers, technical and ancillary services workers, medical coding and medical billing personnel, schedulers, call centers and warehouse workers, and laundry workers.

• Food Facility Employers (SB 476)

Effective January 1, 2024, SB 476 requires all food facility employers to pay for the time and costs associated with an employee obtaining a food handler card (a certificate required for all food facility employees who are involved in the preparation, storage, or service of food in a food facility). To get this card, an employee must complete training and examination that meet certain requirements. Under the new law, employers are also prohibited from conditioning employment on the applicant or employee having a food handler card.

• Grocery Store Workers (AB 647)

AB 647 revises the Labor Code and expands recall rights for eligible grocery workers when there is a change of control in a grocery establishment. Under the law, eligible grocery workers include non-managerial/non-supervisory employees whose primary place of employment for at least six months prior to the change of control is (i) a retail store that is over 15,000 square feet in size and primarily sells household foodstuffs (including fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, or prepared foods) for offsite consumption, or (ii) a distribution center owned and operated by a grocery establishment and used primarily to distribute goods to or from its owned stores. (A grocery establishment does not include a retail store that has ceased operations for 12 months or more.) Under the law, buyers of an existing grocery store must retain eligible grocery workers for a 90-day transition period during which they may only be discharged for specified causes, and buyers must consider eligible grocery workers for continued employment at the end of the transition period. The law prohibits retaliation against eligible grocery workers who seek to enforce their rights, authorizes a private right of action and representative actions under California’s Private Attorneys’ General Act (PAGA), and authorizes a court to award reasonable attorney’s fees and costs to an employee who prevails in an enforcement action.

There are a lot of changes coming in the new year for employers in California. If you have any questions regarding these changes, please reach out to the attorneys at LBBK!