Overview:

New employment laws in California are here in 2024, with topics ranging from increased paid sick leave to new workplace violence prevention plan requirements.  Here’s a rundown of some of the changes:

SB 3; AB 1228; SB 525:  Minimum Wage Increases

• Minimum wage is now $16.00/hour in California; some local jurisdictions require more.

SB 616:  Additional California Paid Sick Leave Benefits

• Paid sick leave benefits have been increased for employees.

SB 848:  Employee Leave for Reproductive Loss

• Leave is required to be given to employees who have worked for at least 30 days and have suffered a “reproductive loss event.”

SB 476:  Food Handler Cards

• Employers must pay for the costs associated with the training and testing of employees who must obtain a food handler card.

Form I-9:  Employment Eligibility Verification 

• All employers must use the revised Form I-9 (Employment Eligibility Verification) when completing the employment eligibility verification process.

SB 699; AB 1076:  Non-Competition Agreements With Employees

• The prohibition against non-competition agreements has been strengthened, and there are new notice requirements.

AB 636:  Updated Wage Theft Prevention Notice

• A new form of the Wage Theft Prevention Notice must be used.

SB 553:  Mandatory Workplace Violence Prevention Plan

• Nearly all California employers must establish, implement, and maintain a workplace violence prevention plan.

SB 497:  Rebuttable Presumption of Workplace Retaliation

• If an employer takes adverse action against an employee within 90 days after the employee engages in certain protected activity, then there is a rebuttable presumption of retaliation.

SB 365:  Elimination of Automatic Stay of Litigation Pending Arbitration Appeal

• Parties seeking to arbitrate claims must continue to litigate the merits of those claims while a denied motion for arbitration is appealed, unless the trial court exercises its discretion to order a stay.

SB 594:  Public Prosecutors May Bring Actions for Wage and Hour Violations

• Public prosecutors can file civil and criminal actions for violations of certain provisions of the California Labor Code related to the payment of wages to employees and willful misclassifications of individuals as independent contractors.

SB 3; AB 1228; SB 525:  Minimum Wage Increases

Effective January 1, 2024, the minimum wage in California is $16.00 per hour.  As such, the minimum annual amount to meet the “white collar” salaried employee exemption increases to $66,560.00.  Certain local minimum wage ordinances also include increased rates, including San Diego ($16.85/hour), San Jose ($17.55/hour), and West Hollywood ($19.08/hour).  In addition, for certain fast-food employees, the minimum wage increases to $20.00 per hour effective April 1, 2024 (AB 1228), and there is an increased range of minimum wages for certain healthcare workers effective June 1, 2024 (SB 525).  Employers must carefully review all applicable local minimum wage requirements and ensure their workers are properly classified and paid.

SB 616:  Additional California Paid Sick Leave Benefits

Under SB 616, an employer must choose to implement one of the following three methods:

(i) frontload 40 hours (5 days) of paid sick leave (previously 24 hours / 3 days) at the beginning of each year of employment (or calendar year or 12-month period), and the employer does not need to accrue or carry over unused sick leave; or

(ii) accrue 1 hour of paid sick leave for every 30 hours worked, in which case the employer must carry over the unused paid sick leave from year to year; however, the employer may implement an 80-hour (10-day) accrual cap (previously 48 hours / 6 days) and can limit employee use to 40 hours (5 days) (previously 24 hours / 3 days) during each year of employment (or calendar year or 12-month period); or

(iii) use a different method of accrual that is on a regular basis such that employees have no less than 24 hours of paid sick leave by their 120th day of employment (or calendar year or 12-month period), with no less than 40 hours of accrued sick leave or paid time off by the 200th calendar day of employment (or calendar year or 12-month period).

For employees working a 4/10 alternate workweek, the California Division of Labor Standards Enforcement takes the position that the employer must provide 50 hours of paid sick leave (5 days x 10 hours/day).  The new law continues to exempt from the accrual requirement of certain collective bargaining agreements, and it extends nonretaliation and procedural protections to collective bargaining agreement employees.

SB 848:  Employee Leave for Reproductive Loss

Effective January 1, 2024, this new law requires employers (with 5 or more employees) to provide up to 5 days of protected leave to employees who have worked for at least 30 days and have suffered a reproductive loss event (defined as constituting the day or, for a multi-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction).  The 5 days of protected leave do not need to be taken consecutively but must be taken within 3 months after the reproductive loss event.  If an employee suffers several reproductive losses within a 12-month period, the employer is only obligated to provide up to a maximum of 20 days of protected leave within that period.

The leave time is unpaid unless the employer has a separate policy stating otherwise; provided, however, that the law authorizes an employee to use certain other available leave balances, such as paid sick leave, to receive pay during the leave time.  SB 848 also prohibits retaliation against any person who uses this type of leave or shares information about the leave, and it requires employers to maintain employee confidentiality pertaining to the reproductive loss event.  Finally, this new law does not require any special paperwork or form to be provided by the employee in order to utilize reproductive loss leave.

SB 476:  Food Handler Cards

Effective January 1, 2024, SB 476 requires employers to pay for the costs associated with the training and testing of employees who must obtain a food handler card.  Employers must pay for the costs of the food handler card course itself and pay the employee their regular wages for the time they spend during training courses and taking the examination, and employees must be relieved of all other work responsibilities during those times.  In addition, (i) employers cannot condition employment on the applicant having an existing food handler card, (ii) the timeframe for food-handling employees to obtain a food handler card does not change (i.e., must be within 30 days after the date of hire), and (iii) employers must continue to maintain records documenting that each food-handling employee possesses a valid food handler card, and such records must be given to enforcement officers upon request.

Form I-9:  Employment Eligibility Verification 

As of November 1, 2023, all employers must use the revised Form I-9 (Employment Eligibility Verification, provided through the Department of Homeland Security – U.S. Citizenship and Immigration Services) when completing the employment eligibility verification process. The updated Form I-9 reflects the option for certain employers to remotely verify employment eligibility.  In particular, for employers enrolled in E-Verify, they may remotely examine their prospective employees’ identity and employment authorization documents using the process in Section 4.5 (Remote Document Examination – Optional Alternative Procedure to Physical Document Examination) of the Handbook for Employers (M-274).

SB 699; AB 1076:  Non-Competition Agreements With Employees

On the whole, post-employment non-competition and non-solicitation agreements are outright prohibited in California.  The new law strengthens this prohibition by providing that such contracts are unenforceable regardless of where and when they were signed, even if the employment is maintained outside of California.  Additionally, the new law clarifies that employers cannot enter into non-competition agreements at all, and they cannot attempt to enforce any non-competition agreements.  Employees also have a private right of action to enforce the new law and can obtain injunctive relief, actual damages, and attorneys’ fees; notably, there is no attorneys’ fee provision for a prevailing employer.  For employees hired after January 1, 2022, employers must notify them (in writing and by February 14, 2024) that any non-competition clause or agreement already entered into is void and non-enforceable.

AB 636:  Updated Wage Theft Prevention Notice

Existing law requires employers to provide each employee with a Wage Theft Prevention Notice at the time of hiring, which includes certain basic terms of employment such as rate of pay, paydays, legal name and address of the employer, workers’ compensation information, and paid sick leave information.

Among other things, AB 636 includes a new requirement that the Wage Theft Prevention Notice must provide information about whether, within 30 days before the employee’s first day of employment, there is a state or federal emergency or disaster declaration applicable to the county or counties where the employee will work that may affect their health and safety during employment.  The California Labor Commissioner has published an updated Wage Theft Prevention Notice to address the new requirements, which can be found here: AB 636  Updated Wage Theft Prevention Notice.

SB 553:  Mandatory Workplace Violence Prevention Plan

On or before July 1, 2024, nearly all California employers must establish, implement, and maintain a workplace violence prevention plan.  Excluded employers include certain healthcare facilities, locations operated by the Department of Corrections and Rehabilitation, law enforcement agencies, telework locations of the employee’s choice that are not under the control of the employer, and certain places of employment with fewer than 10 employees working at any given time and that are not accessible to the public.  Under the new law, the plan must include, among other things, the following:

• The names or job titles of the individuals responsible for implementing and maintaining the workplace violence prevention plan.
• Procedures to obtain the active involvement of employees in developing, implementing, and reviewing the workplace violence prevention plan, including their participation in identifying, evaluating, and correcting workplace violence hazards, designing and implementing training, and reporting and investigating workplace violence incidents.
• Methods the employer will use to coordinate the implementation of the workplace violation prevention plan among employees in the same facility or department.
• Procedures for obtaining assistance from the appropriate law enforcement agency during all work shifts, including a written policy prohibiting the employer from disallowing or taking punitive or retaliatory action against an employee for seeking assistance or intervention from law enforcement or emergency services.
• Procedures for the employer to respond to workplace violence and to prohibit retaliation against employees who make reports of workplace violence.
• Procedures for ensuring compliance with the workplace violence prevention plan.
• Procedures for communicating with employees regarding workplace violence matters.
• Procedures for developing and providing training on the employer’s workplace violence prevention plan.
• Assessment procedures to identify and evaluate risk factors for workplace violence.
• Procedures for correcting workplace violence hazards in a timely manner.
• Procedures for post-incident response and investigation.
• Procedures for the employer to review and update the plan for effectiveness at least annually, or when a deficiency is observed, or after an incident of violence.
• Maintaining policies prohibiting the employer from requiring employees to confront active shooters or suspected shoplifters.

Covered employers must record information about every incident, post-incident, response, and workplace violation injury investigation, all in accordance with the workplace violence prevention plan.  The required “violent incident log” must include certain information, including:  (i) a detailed description of the incident, including date, time, and location; (ii) a description of who committed the violence; (iii) a description of the circumstances surrounding the incident; (iv) information about the type of incident, including whether it involved physical, verbal, sexual, or other attacks; (v) the resultant consequences of the incident, such as medical treatment and whether security or law enforcement was contacted; and (vi) contact information for the individual completing the violent incident log.

California employers subject to this robust new law must review and update their workplace violence prevention plans on an annual basis, provide an evaluation of the incidents that occurred, and maintain records of workplace violence hazards previously identified.

SB 497:  Rebuttable Presumption of Workplace Retaliation

Effective January 1, 2024, SB 497 (the Equal Pay and Anti-Retaliation Protection Act) amends the California Labor Code by creating a rebuttable presumption of retaliation in favor of employee workplace retaliation claims.  The presumption that retaliation occurred applies if an employer takes any adverse action (including firing, disciplining, demoting, or threatening these actions) against an employee within 90 days of the employee engaging in certain protected activity.  This makes it easier for an employee to establish a prima facie case of retaliation.

If the 90-day presumption applies, then the burden automatically shifts to the employer to provide a legitimate (and non-retaliatory) reason for the action(s) that the aggrieved employee claims constituted retaliation.  If the employer can successfully articulate such legitimate reason, then the burden shifts back to the employee to show that, despite the non-retaliatory justification, the employer’s action was nonetheless retaliatory.  The new law also states that the applicable civil penalties are to be awarded to the employee who suffered the violation.

SB 365:  Elimination of Automatic Stay of Litigation Pending Arbitration Appeal

Under previous law, trial court proceedings have been automatically stayed pending an appeal of an order denying a motion to compel arbitration.  Effective January 1, 2024, such an appeal will no longer automatically stay the trial court proceedings.  Instead, the party seeking to arbitrate would still have to litigate the merits of the underlying claims while the case is appealed, unless the trial court exercises its independent discretion to order a stay.

Interestingly, the United States Supreme Court recently issued a contradictory ruling in Coinbase, Inc. v. Bielski, where it held that appealing an order denying arbitration automatically stays federal district court proceedings under the Federal Arbitration Act (FAA).  As such, SB 365 will likely be challenged as preempted by the FAA because it could be viewed as having a chilling effect on arbitration in California.  Until further clarification comes to light, California employers may want to ensure their arbitration agreements expressly invoke the FAA’s procedural rules (as opposed to those governed by the California Arbitration Act) in an attempt to avoid the application of SB 365.

SB 594:  Public Prosecutors May Bring Actions for Wage and Hour Violations

Effective January 1, 2024 and extending through January 1, 2029, this new law authorizes public prosecutors to file actions (civil and/or criminal) for violations of certain provisions of the California Labor Code related to the payment of wages to employees and willful misclassifications of individuals as independent contractors.  Significantly, the new law also provides that arbitration agreements that require employer/employee arbitration and limit representative actions will have no impact on the ability of a public prosecutor or the Labor Commissioner to enforce the California Labor Code. Wages recovered under any such proceedings will be prioritized for making payments to the negatively impacted worker(s), while the civil penalties will be paid into California’s General Fund.  The law also permits public prosecutors to seek injunctive relief and prevailing attorneys’ fees and costs of suit.

Conclusion:

California employers and human resource managers should implement policies and procedures to ensure compliance with these updated and new California employment laws.  These laws are robust, complex, and will require each employer to assess the applicability of each law to their business operations and specific circumstances.  The workplace violence prevention plan is particularly complex and will take significant time, money, and other valuable resources to effectively create, implement, and maintain it in compliance with the law.  Consult with competent legal counsel and act accordingly.