What Changes Does 2023 Have in Store for California Employers?
A Summary by Thakur Law Firm
As 2023 kicks off, California employers must brace to comply with a flood of new employment laws and changes to existing laws and regulations that affect workplaces statewide.
While the COVID-19 pandemic drops from the top of lawmakers’ agendas, a new surge of workplace issues has inspired a full spate of new legislation, most of which went into effect on January 1, 2023. California employers must get on board or risk bearing the brunt of the latest wave of lawsuits and regulatory clampdowns to hit the state. Changes affect:
Workplace Discrimination
Pay Transparency
Leaves of Absence
Paid Family Leave
Workplace Safety
Employee Privacy
Retirement Programs
COVID-19 Requirements
Fast Food Industry
Agriculture Industry
Call Center Relocations
At Thakur Law Firm, we’ve been carefully monitoring the 2023 legislative docket. Below, our team has compiled a summary of the most significant laws that California employers must adapt to in the new year. When it comes to compliance, we can help.
Unless otherwise specified, all laws discussed below have gone into effect on January 1, 2023 – so it’s critical to get your compliance up to speed as soon as possible.
1. Workplace Discrimination
Two new laws are broadening California’s Fair Employment and Housing Act (FEHA) to include greater employee protections. Employers must be aware of these changes to act appropriately.
Cannabis Use in the Workplace
Starting January 1, 2024, FEHA will include cannabis protection – making it illegal for California employers to discriminate against their employers for using cannabis while off the job and away from the workplace. If you find out your employee has been using cannabis during their off hours, you cannot take negative action against them at work.
Once this law (AB 2188) comes into effect in 2024, if you fire, demote, or otherwise discipline a worker for cannabis use, they could potentially sue you for workplace discrimination.
However, this right is not protected if the employee uses cannabis at work or while they’re working. And while the new legal protections cover cannabis use, this right does not extend to other illegal substances – even if employees choose to use them in their own free time.
Reproductive Health Decision-Making
In a similar fashion, California’s Fair Employment and Housing Act will be extended under SB 523 on January 1, 2024 to prohibit employers from discriminating against an employee based on their reproductive health decisions.
That means you cannot take any action against any of your employees because they use or access a particular drug, device, product, or medical service for the purposes of birth control or reproductive health. If you discipline, demote, or terminate an employee based on these choices, they could file a lawsuit against you for workplace discrimination.
2. Pay Transparency
California lawmakers have put pay transparency at the top of their dockets, enacting a sweeping new law (SB 1162) that requires employers across the state to comply.
Pay Scale Information
Under SB 1162, all California companies, no matter how big or small, must provide a pay scale for any employees who work for you and request this information. You must also keep job title and wage history records for employees for as long as they work for you plus 3 years. California’s Labor Commissioner reserves the right to inspect these records at any time to check for any patterns of wage discrepancy or discrimination.
For employers with 15 or more employees, you must include pay scale information in job postings and provide this information for any 3rd party recruiters who post on your behalf.
Failing to comply with SB 1162 could lead to legal trouble. Specifically, your employee could file a claim against you with fines ranging from $100 to $10,000 after the first violation.
Pay Data Reporting
If you have 100 or more employees, SB 1162 also requires reporting the median and mean hourly rate for each job category and combination of race, ethnicity, and sex.
The first report under these new requirements is due May 10, 2023. That’s coming up!
3. Leaves of Absence
New California laws AB 1041 and AB 1949 apply to employers with 5 employees or more. Although these new laws allow for unpaid leave time, employees may use alternative available paid leave such as PTO or paid sick leave during their time away.
Leave to Care for a “Designated Person”
The California Family Rights Act (CFRA) and the Healthy Workplace Healthy Families Act (HWHFA) allow employees to take legally protected leave from work to care for a spouse, registered domestic partner, child, parent, parent-in-law, grandparent, grandchild, or sibling.
However, starting on January 1st, 2023, a new law AB 1041 allows employees to take CFRA or HWHFA leave for any designated person, expanding your employees’ rights. Specifically, employees get legally protected leave to care for:
Anyone related by blood to the employee, or
Anyone whose association with the employee is equivalent to a family relationship.
Employees must simply designate who they’re caring for when they request leave. As an employer, you may limit this to just a single person per 12-month period.
Employee Bereavement Leave
California’s new law AB 1949 allows employees to take protected bereavement leave for up to 5 days within 3 months of the death of a family member – a spouse, child, parent, sibling, grandparent, grandchild, registered domestic partner, or parent-in-law.
Employees get this right as long as they’ve worked for you for at least 30 days. As an employer, you have the right to require documentation before approving bereavement leave.
4. Paid Family Leave
Under new law SB 951, California’s wage replacement rates have been extended through December 31, 2024. Currently, the rate is up to 70% of regular wages for California’s Paid Family Leave (PFL) program and State Disability Insurance (SDI) program. After December 31, 2024, these rates will increase to up to 90% of regular wages.
If you're a small business faced with these rising costs, you're not completely out of luck. California will also offer employers a PFL grant program to help eligible small businesses offset up to $2,000 in costs related to employee leave. At Thakur Law, we can help you determine your eligibility for this program before the funds are exhausted or it ends on May 31, 2024.
5. Workplace Safety
Starting in 2023, you must post the new employee workplace safety notification prepared by Cal/OSHA in English and the top 7 non-English languages required by law.
Retaliation or Adverse Action
California’s new law SB 1044 makes it illegal for employers to take or threaten adverse action against an employee who leaves or refuses to report to a workplace that they reasonably believe is unsafe. This law does not apply to exempt employees such as first responders.
This law applies to extreme conditions, such as:
Disaster or extreme peril caused by natural forces or criminal acts, or
Orders to evacuate a workplace, worksite, worker’s home, or the school of a worker’s child because of a natural disaster or criminal act.
The law specifically states that health pandemics do not qualify as emergency conditions.
If possible, employees must notify their employers in advance of any emergency conditions or as soon as possible once they become aware of the situation.
The law also makes it illegal for employers to prevent employees from using a communications device (such as their phone) for the purpose of responding to an emergency.
6. Employee Privacy Disclosures
Starting on January 1, 2023, the California Privacy Rights Act (CPRA), or Proposition 24, requires applicable employers to comply with multiple notice and disclosure requirements related to personal information collected from employees and job applicants.
Previously, the California Consumer Privacy Act (CCPA) carved out privacy exceptions for employees. However, the CPRA now specifically extends these protections to workers.
This new law is quite complex, with numerous obligations involving employees’ privacy rights. For example, employees get the right to opt out of using a business’s “automated decision-making technology” used to analyze their performance, health, personal preferences, interests, behavior, location, or movements. Employees may also limit the use and disclosure of their “sensitive personal information” including:
Their exact geolocation data at any time
The specifics of their racial or ethnic origins
Their union membership status
Contents of some email and text messages
Personal biometric information
As an employer, you must also use “commercially reasonable efforts” to allow an employee to correct inaccurate personal information when requested.
Because personal information is such a sensitive topic, it’s important to talk to a business lawyer about your rights as an employer. For example, an employee’s right to privacy extends to information that the average person would reasonably expect to be private. So, collecting racial background information may be reasonable if you’re doing it for diversity and inclusion purposes. At Thakur Law, we can help you navigate the nuances of this law.
7. Retirement Savings Programs
SB 1126 expands the CalSavers Retirement Savings Program to include any person or entity with at least one employee. That means if you haven’t had to offer your own sponsored retirement program to employees up to this point, you must implement a payroll deposit retirement savings arrangement at your company by December 31, 2025.
This new law does not include sole proprietorships, self-employed individuals, or business entities that don’t employ anyone other than the owners.
8. COVID-19 Requirements
While COVID-19 isn’t necessarily at the top of legislators’ minds, it’s still a relevant topic.
COVID-19 Workers’ Compensation
New law AB 1751 extends workers’ compensation rights for employees who contract COVID-19 under certain conditions to January 1, 2024.
COVID-19 Notice Requirements
AB 2693 requires employers to prominently display a notice for 15 days when there has been a potential COVID-19 exposure in the workplace. The notice must include the dates on which the COVID-19 case was at the work site within the infectious period.
However, you no longer need to report COVID-19 cases to your local health department.
9. Fast Food Industry Changes
AB 257 is a fast food industry-specific law that creates the Fast Food Council within California’s Department of Industrial Relations. This council will have the power to:
Determine industry standards on wages, working conditions, and training
Issue, amend, or repeal any rules or regulations to carry out its duties
Conduct a full review of fast food working standards each year
Hold public meetings or hearings at least every 6 months
Create local fast food councils to make recommendations to the state council
As a fast food business owner or franchisee, this council will play a major role in your industry, deciding issues such as working hours, minimum wages, and overtime conditions.
10. Agricultural Worker Protections
AB 2183 affects the union election process for agricultural workers in California.
Specifically, the new law allows a labor organization to be certified as the exclusive bargaining representative of a bargaining unit if the majority of members agree and the Agricultural Labor Relations Board (ALRB) approves.
The law also establishes schedules, processes, and other requirements for how agricultural employers communicate with their employees and the statements they can and cannot make regarding employee rights and union representation.
Each violation under AB 2183 could cost you $10,000 to $25,000 depending on the severity. If you’re a director or officer of an agricultural company, you may even be held personally liable for penalties in certain cases. Your employment lawyer can help you avoid these missteps.
11. Call Center Relocations
If you employ or have employed at least 75 people at a call center within the last 12 months and you want to relocate that call center to a foreign country – laying off or terminating those local employees in the process – new law AB 1601 requires you to:
Give at least 60 days of notice to the affected employees along with the local Employment Development Department, the local workforce investment board, and the chief elected official of each city and county government, and
Comply with the California Worker Adjustment and Retraining Act (Cal/WARN).
If you fail to comply with this law, California’s Labor Commissioner could authorize an investigation, order you to mitigate the losses to your employees during the investigation, or issue a citation. Ultimately, you may become ineligible for California state grants, state-guaranteed loans, or state tax credits for up to 5 years.
Conclusions and Takeaways
A new year means a new docket of legislation in the books. To avoid liability, employers must stay mindful of all the legal changes that go into effect at the beginning of the year.
At Thakur Law, we stay on top of all the relevant court decisions and legislative trends so that you can rest assured that your business is covered every year. You won’t get blindsided by new laws when you have our talented team looking ahead with your best interests in mind. We’re here to offer practical, effective strategies to adapt to these legal changes.
Call us now at (714) 772-7400 to make sure you’re ready for the new year.
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