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  • Writer's pictureThakur Law Firm, APC

7 New Employment Laws Affecting Medical Practices in California


If you’re a physician running your own medical office, you know that the success of your practice is more than just about seeing patients. One of the most important aspects of having your own practice is keeping up with any new laws and legal changes.

California passed multiple laws affecting medical practices in late 2021 and early 2022. Now is the time for you to look through your workplace compliance policies and make updates where necessary. Failing to comply with new laws could lead to penalties and other repercussions.

1. Wage Increases and Wage Theft Penalties

As of January 1, 2022, California’s state minimum wage has increased for both hourly and salaried workers. Starting this year, the state is also cracking down harder on wage theft.

In 2022, any wage theft in excess of $950 will be classified as “grand theft” in California, which makes it punishable as either a misdemeanor or felony. The U.S. Labor Commission can hear employee complaints and impose civil penalties on employers for failing to pay wages.

Wage theft can come in many forms – unpaid “off the clock” work, poor recordkeeping, illegal deductions, uncompensated meal breaks, worker misclassification, minimum wage violations, or overtime pay violations. Even if you don’t intentionally try to steal from your workers, mismanaging their pay can lead to dire consequences. A thorough review of your wage policies can help you avoid landing in hot water with the Labor Commission.

The state’s sub-minimum wage certificate program for disabled workers is also being phased out starting in 2022. No new licenses may be renewed as of this year and all disabled employees must be paid the regular minimum wage by January 1, 2025.

2. Workplace Regulatory Procedures

Starting in 2022, you must now preserve all personnel records for a minimum of four years. Previously under California’s Fair Employment and Housing Act, this was two years.

One new law (SB 362) is specific to “chain community pharmacies” – defined as 75 or more pharmacies in California under the same ownership. These pharmacies may no longer establish “quotas” with fixed numbers for pharmacists to meet in their job performance.

For businesses with multiple worksites, Cal/OSHA now gets greater authority investigating safety violations. The department can now use evidence of workplace safety violations at one worksite to look into possible violations at other worksites. Cal/OSHA can issue “enterprise-wide” citations even for locations where no violations were found.

3. Latest COVID-19 Safety Laws and Regulations

COVID-19 protocols seem to change every day. But major changes went into effect for medical employers on January 14, 2022 under OSHA’s new regulations. These include:

  • Employers must provide no-cost COVID-19 testing on paid time to all employees exposed to COVID-19 at work, either as a close contact or in an exposed group. This covers all workers, including those who are asymptomatic and fully vaccinated.

  • Employees who are exempt from wearing masks and cannot wear a non-restrictive alternative must physically distance from other workers by at least 6 feet and must be tested at least twice weekly at no cost to the employee, during paid time.

  • Changes to government guidelines for how long employees must wait before returning to work after a “close contact” exposure to COVID-19.

In addition, medical employers are required to notify their workers of potential COVID-19 exposures, COVID-19 benefits, and COVID-19 workplace safety protocols. In the case of a large outbreak, you may have to provide notice to your local public health agency.

4. Expansion of the California Family Rights Act (CFRA)

The California Family Rights Act (CFRA) is one of the most employee-protective laws in the country, giving employees the right to take unpaid time to care for family members.

Previously, the CFRA applied only to employers with 50 or more employees. As of January 1, 2022, all employers with 5 or more employees are covered under the CFRA.

This could be a huge change – especially for smaller medical practices. If you’re not used to enforcing the CFRA, you should create your workplace policies with the help of legal counsel.

5. Limits on Employee Settlement and Separation Agreements

The “Silence No More Act” prohibits confidentiality clauses in settlement agreements when the agreement involves claims based on a protected characteristic.

As a result, in California, confidentiality clauses cannot be used in settlement agreements regarding sexual harassment, or harassment or discrimination based on race, religion, national origin, ancestry, disability, medical condition, marital status, gender, or age. Only the total amount of the settlement may remain confidential.

You also cannot prohibit your employees from discussing or disclosing information about unlawful acts in the workplace, including harassment or discrimination. The same limits also apply to the terms of employee separation agreements.

6. Stricter Penalties for Employee Arbitration Agreements

Under new law SB 762, if you have an employee arbitration agreement, your arbitration provider must be up-front about the cost and you must pay the arbitration fees in a timely fashion.

If you fail to pay your arbitration fees in time, you could lose your right to arbitration. You could even be on the hook for paying the attorney’s fees and costs of the employee.

7. How to Classify Independent Contractors

Medical practices need staff to function – nurses, administrative workers, janitorial staff, data aggregators, technicians. It’s critical that you classify each of your workers properly as either an exempt or non-exempt employee or an independent contractor.

Employees get much greater workplace protections and benefits, while independent contractors enjoy greater flexibility and freedom in their work. Because independent contractors don’t get benefits like health insurance or social security through their employer, they’re often cheaper.

But misclassifying an employee as an independent contractor to save money is illegal and will backfire. Still, classifying workers isn’t always easy. In 2022, two new laws provide greater guidance on how to classify participants such as research subjects.

The medical field is constantly changing with new laws and regulations. A healthcare business lawyer can make sure that your medical practice stays in compliance. Call the California offices of Thakur Law Firm now at (714) 772-7400 or use our contact form here.


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