California's New Employment Bills: What You Need to Know
Updated: Nov 10
As is becoming all too common, the end of the legislative year has resulted in a significant number of new laws being passed which affect employers. These laws address various aspects of employee rights, protections, and workplace regulations. In this article, we'll provide a summary of the key provisions of these new bills and what they mean for both employers and employees. As a reminder, you will want to incorporate this into your handbook. Contact our office if you need help updating your handbook. Additionally, we will be doing an Annual Legal Review at some point between Thanksgiving and the New Year. We will send out an email with the definite dates in the near future. We will stream the presentation live over Zoom for those interested. However, breakfast and other goodies will be provided to those who attend in person. Read on for a summary of each of the newly passed bills:
SB 616 - Paid Sick Leave
SB 616 increases paid sick leave accrual from 24 hours or 3 days to a minimum of 40 hours or 5 days by the 200th day of employment or each calendar year. It also increases the cap on paid sick leave to 10 days. This change takes effect on January 1, 2024. This also affects notices regarding sick time, so we have attached an updated Notice to Employee (Labor Code section 2810.5) form for the hiring of new employees.
SB 699 - Prohibition of Non-Compete Agreements
On September 1, 2023, SB 699 was approved, becoming effective on January 1, 2024. It states: (a) any contract with a non-compete provision is unenforceable regardless of where and when the contract was signed, (b) California employers cannot attempt to enforce a contract with a non-compete (even if the employment was outside of California); and (c) California employers cannot enter contracts with employees or prospective employees with non-competes and doing so is a civil violation. SB 699 also allows employees and former employees to sue to prevent the enforcement of a non-compete and to collect both actual damages and attorney’s fees and costs.
AB 1076 - Unlawfulness of Non-Compete Clauses
AB 1076 makes it unlawful “to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement” that does not satisfy an exception under Section 16600. AB 1076 takes effect on January 1, 2024, and employers have until February 14, 2024, to notify current and former employees who were employed after January 1, 2022, in writing that the noncompete clause or agreement is void to the extent that such employers signed such clauses. As a result, please review any documents that you have put in front of employees since January 1, 2022, that may limit the employee’s right to compete and review those documents with an attorney to determine if notice must be provided.
SB 723 - Employee Recall Rights
In 2021, California enacted SB 93, requiring the rehiring of laid-off hospitality industry employees based on seniority, encompassing various businesses. Senate Bill 723 now extends these protections until December 31, 2025. It includes those separated from employment after March 4, 2020, by their employer for at least six months, assuming the separation is due to COVID-19-related reasons, with the ability to challenge this presumption.
SB 497 - Protection Against Retaliation
SB 497 establishes a rebuttable presumption of retaliation within 90 days of an employee engaging in protected conduct under the labor code and on January 1, 2024.. This includes but is not limited to: filing claims with the Labor Commissioner, whistleblowing under the Labor Code, cooperating with the EDD, serving as a juror, witness, or election officer, protecting victims of specific crimes, opposing certain unlawful or unsafe acts and practices, and supporting labor organization activities. The law also establishes an up to $10,000 fine per employee for each time an employer makes, adopts, or enforces a rule, regulation or policy which prevents an employer from disclosing information to certain entities or from providing information to, or testifying before, any public body conducting an investigation, hearing, or inquiry if the employee has reasonable cause to believe that the information discloses a violation of a law, as specified or engaging in retaliation. It also creates a rebuttable presumption in favor of the employee that retaliation occurred where an employee suffers an adverse employment action within 90 days of disclosing the employee’s own wages, discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise these and other rights.
SB 525 - Minimum Wage for Healthcare Workers
SB 525 increases the minimum wage for healthcare workers to $21 per hour in 2024 and $25 per hour in 2025. The first incremental increase is scheduled for June 1, 2024. The speed at which these minimum wage hikes are implemented will differ based on the employer's size and type.
AB 594 - Public Prosecution for Wage Violations
AB 594 grants public prosecutors, including the Attorney General and local prosecutors, the autonomy to pursue wage and hour violation cases within their jurisdictions. This changes the previous practice where only the Labor Commissioner had this authority. Public prosecutors can now independently initiate civil or criminal actions to enforce Labor Code provisions without needing direction from specific divisions. The law also bars agreements that limit the Labor Commissioner or public prosecutors from enforcing the Labor Code, and it allows them to address misclassification violations. AB 594 is effective until January 1, 2029.
SB 848 - Leave for Reproductive Loss and Failed Adoption
SB 848 provides unpaid leave for reproductive loss and failed adoption, and begins on January 1, 2024. This bill defines a reproductive loss as a failed surrogacy, miscarriage, stillbirth, failed adoption, or unsuccessful assisted reproduction. This affects all businesses with five or more employees. If the employee has been working for at least 30 days and experiences a reproductive loss, e.g., a miscarriage, they may take up to 5 days per reproductive loss/failed adoption and a maximum of 20 days off within 12 months. Any leave relating to a particular event must be taken within three months of the event. Unlike California's Pregnancy Disability Leave, men can also use this leave if they would have become a parent if not for the event that occurred.
SB 428 - Expansion of Workplace TROs
Starting January 1, 2025, SB 428 allows employers to obtain Temporary Restraining Orders (TROs) under specific conditions. Employers can request a TRO if they can provide substantial evidence that an employee is a victim of unlawful violence or credible threats, and not issuing the TRO would harm the employee significantly. In cases of employee harassment, clear and compelling evidence is needed, demonstrating the harassment, potential harm to the employee without the TRO, lack of a legitimate purpose by the perpetrator, and no legal prohibition on the TRO. The statute excludes TROs for actions protected by free speech rights, the National Labor Relations Act, or other relevant laws.
SB 700 - Prohibition of Cannabis Use Inquiry
SB 700, signed into law on October 7, 2023, and effective from January 1, 2024, brings changes to how employers handle marijuana-related issues. It prohibits employers from asking about past marijuana use or conducting certain marijuana-related drug tests. Employers cannot discriminate based on scientifically valid pre-employment drug tests excluding non-psychoactive cannabis metabolites. Exceptions apply to specific employers, including those in building and construction trades or conducting federal background checks. The law doesn't prevent employers from disciplining employees for on-the-job cannabis use or possession.
These new bills introduce significant changes to California's employment landscape, impacting various aspects of workplace rights and regulations. Employers should familiarize themselves with these laws to ensure compliance and understanding of rights and responsibilities. A good first step in that process is to attend the end of year review, which will be taking place at some point between Thanksgiving and the New Year. If you’re interested in attending, please let us know. Also, make sure to promptly update your handbooks and leave policies. Additionally, ensure that you train your management and human resources professionals to recognize these new laws and properly refer to the company’s updated policies and procedures.
Please feel free to contact us if you would like us to take a look at your handbook and make the necessary changes.