In the ever-changing landscape of labor and employment laws, staying informed is crucial for both employers and employees. As we usher in the new year, California has implemented several significant changes to its labor and employment laws. Here's a breakdown of the key updates that employers and employees should be aware of in 2024. Please be aware that the overview provided below does not encompass all the recent California laws affecting employers or employees. Instead, it focuses on the California laws we consider most noteworthy in terms of their breadth and influence on individuals or businesses operating within the state.
SB 616 – Paid Sick Leave (Effective January 1, 2024)
SB 616 brings modifications to California's sick leave law, enhancing the accrual and usage allowances for employees. Specifically, it raises the minimum accrual limit from 48 hours (or six days) to 80 hours (or 10 days) and increases the annual usage limit from 24 hours (or three days) to 40 hours (or five days). Employers choosing to "frontload" sick leave must provide a minimum of 40 hours or five days of sick leave due to the heightened usage cap. Employees under SB 616 are entitled to earn a minimum of five days or 40 hours of sick leave or paid time off within six months of employment. Additionally, this bill modifies the alternate sick leave accrual method, ensuring employees have at least 40 hours of accrued sick leave or paid time off by the 200th calendar day of employment or each calendar year, or within each 12-month period. Notably, SB 616 maintains the existing accrual rate of one hour of sick leave for every 30 hours worked, but introduces procedural requirements for the use of paid sick days for employees covered by a collective bargaining agreement. These changes are reflected in the amendments made to sections 245.5, 246, and 246.5 of the Labor Code.
AB 1076 – Noncompete Agreements in Employment (Effective January 1, 2024)
Starting January 1, 2024, AB 1076 introduces significant changes to noncompete agreements in employment within California. The bill reaffirms the existing law (California Business and Professions Code Section 16600) that deems any contract restraining someone from lawful professional activities void, with limited exceptions.
AB 1076 broadens the scope of Section 16600, in line with the California Supreme Court's 2008 Edwards v. Arthur Andersen LLP decision, ensuring the nullification of all noncompete agreements or clauses in employment contracts, regardless of their specificity. Under AB 1076, employers are prohibited from including noncompete clauses in employment contracts or compelling employees to enter such agreements. Employers must notify current and former employees (hired after January 1, 2022) with noncompete clauses by February 14, 2024, informing them of the void status of these agreements. The notice must be personalized, sent to the employee's last known address and email. Violations may lead to legal consequences under Business & Professions Code Section 17200, including injunctions and restitution.
Exceptions apply, such as noncompete agreements related to specific ownership sales in the employer's context. These changes modify Section 16600 and introduce Section 16600.1 to the Business and Professions Code.
SB 699 – Contracts in Restraint of Trade, aka Noncompetes (Effective January 1, 2024)
SB 699 builds on existing law, notably AB 1076, which invalidates agreements restraining employees from lawful professions, trades, or businesses, except in specific cases like certain ownership interest sales. SB 699 aims to safeguard the mobility of individuals working for California-based employers, regardless of their residence. This legislation expands current regulations by prohibiting employers from establishing noncompete contracts or clauses, making these provisions unenforceable even if agreed upon and employed outside California. SB 699 grants employees, former employees, and prospective employees the right to file a private civil action, allowing them to seek injunctive relief, actual damages, and recover reasonable attorneys’ fees and costs if they succeed. The changes are incorporated into the Business and Professions Code through the addition of Section 16600.5.
SB 700 – Cannabis Use (Effective January 1, 2024)
SB 700, effective January 1, 2024, revises existing regulations concerning cannabis use in employment. Previously, employers were prohibited from discriminating against candidates or employees for off-duty cannabis use, except under specific circumstances, such as federal law permitting controlled substances testing or certain job requirements. SB 700 alters this law by making it illegal for employers to inquire about an applicant's past cannabis use or consider their previous cannabis-related criminal record. The bill maintains existing exemptions and introduces new ones, allowing employers to request this information in specific situations outlined by state or federal law, or for employment within the building and construction trades.
These changes are reflected in the amendment made to Section 12954 of the Government Code.
AB 521 – Toilet Facilities at Construction Jobsites (Effective January 1, 2024)
AB 521 addresses toilet facilities at construction jobsites in California. Effective January 1, 2024, the law mandates the Division of Occupational Safety and Health (Cal/OSHA) to propose a rule before December 1, 2025, requiring at least one single-user toilet facility on every construction site specifically designated for employees who identify as female or nonbinary. The legislation aims to address the challenges faced by underrepresented groups, such as women and nonbinary individuals, in the construction industry. Unlike other establishments, the requirement for all-gender restroom facilities does not apply to construction sites, as stated in the amendment to Section 118600 of the Health and Safety Code and the addition of Section 6722 to the Labor Code.
AB 1228 – Fast food Restaurant Industry (Effective January 1, 2024; $20 Minimum Wage Effective April 1, 2024)
AB 1228, effective January 1, 2024, introduces significant changes to the fast-food restaurant industry by establishing a Fast Food Council and increasing the minimum wage for fast-food workers. This legislation is the result of a compromise between fast-food companies and labor unions, arising from the postponement of last year's Fast Food Accountability and Standards Recovery Act (AB 257) due to a referendum scheduled for November 2024.
Under AB 1228, the minimum wage for employees working at national fast-food chains will be raised to $20 per hour, starting from April 1, 2024. National fast-food chains are defined as those with a minimum of 60 limited-service establishments nationwide that share a common brand and offer standardized options for decor, marketing, packaging, products, and services. However, bakeries exclusively selling bread products are exempt from this regulation.
Additionally, as of January 1, 2024, AB 1228 establishes the Fast Food Council, which is empowered to recommend minimum standards for working hours and other conditions within fast-food chains. The Council has the authority to annually increase the minimum wage for fast-food chains starting January 1, 2025, by a maximum of 3.5 percent or the annual average change in the United States Consumer Price Index for Urban Wage Earners and Clerical Workers, whichever is lower.
This legislation results in the repeal of sections 1470, 1471, 1472, and 1473 of the Labor Code and introduces new sections 1474, 1475, and 1476 to the Labor Code.
SB 428 – Temporary Restraining Orders for Employee Harassment (Effective January 1, 2025)
Commencing January 1, 2025, SB 428 introduces changes to existing laws concerning employer actions against harassment in the workplace.
Previously, employers could seek restraining orders and injunctions for employees who experienced unlawful violence or credible threats of violence at work. SB 428 extends this authority to cases of employee harassment. Employers are now empowered to obtain restraining orders and injunctions against individuals who have harassed their employees. Notably, this bill grants employees the option to opt out of being named in the order before the employer files the petition. Additionally, the legislation explicitly prevents courts from issuing orders that impede protected speech or activities, including those safeguarded by the constitution, the National Labor Relations Act, or any other applicable laws.
These modifications involve amendments, repeals, and additions to Section 527.8 of the Civil Code of Procedure.
SB 497 – Equal Pay and Anti-Retaliation Protection (Effective January 1, 2024)
Existing law prohibits a person from discharging an employee or in any manner discriminating, retaliating, or taking any adverse action against any employee or applicant for employment because the employee or applicant engaged in protected activity. Existing law also prohibits an employer from discharging, or discriminating or retaliating against, an employee because of an action taken by the employee to invoke the provisions of the Equal Pay Act, including the provision that an employer is prohibited from paying an employee at wage rates less than the rates paid to an employee of the opposite sex, or of another race or ethnicity, for substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions. An employer can defeat an Equal Pay Act claim by proving that the difference in pay for substantially similar work is due to: seniority; merit; a system that measures production; and/or a “bona fide factor other than sex, race, or ethnicity.”
SB 497 – also referred to as the Equal Pay and Anti-Retaliation Protection Act – creates a rebuttable presumption of retaliation if an employee if disciplined or discharged within 90 days of engaging in certain protected activity protected by the California Labor Code or California's Equal Pay Act, making it easier for employees to establish a prima facie case of retaliation.
Faced with the rebuttable presumption, an employer must articulate a legitimate, nonretaliatory reason for the alleged retaliation. If the employer does so, the burden shifts back to the employee to demonstrate that, despite the nonretaliatory justification proffered by the employer, the adverse action was nonetheless retaliatory in nature.
Further, SB 497 establishes that in addition to other remedies, an employer is liable for a civil penalty not exceeding $10,000 per employee for each violation of amended Labor Code Sections 98.6 and 1102.5, to be awarded to the employee or employees who suffered the violation. In assessing this penalty under Labor Code Section 1102.5, the Labor Commissioner must consider the nature and seriousness of the violation based on the evidence obtained during the course of the investigation, including but not limited to the type of violation, the economic or mental harm suffered, and the chilling effect on the exercise of employment rights in the workplace.
This bill amends Sections 98.6, 1102.5 and 1197.5 of the Labor Code.
SB 525 – Health Care Workers’ Minimum Wages – (Effective January 1, 2024, But First Pay Changes Due June 1, 2024).
SB 525 introduces comprehensive changes to the minimum wage for healthcare employees in California, establishing five distinct wage schedules based on the employer type. Covered healthcare employees encompass various roles in healthcare facilities. Here's a breakdown of the minimum wage schedules:
Large Healthcare Facility Employers (10,000+ employees or part of a large healthcare system):
- $23 per hour starting June 1, 2024.
- Increase by $1 per hour for the next two years.
- Adjustments based on the Consumer Price Index (CPI) thereafter.
Hospitals with Governmental Payor Mix, Independent Hospitals, Rural Facilities, or Certain County Affiliated Facilities (Population < 250,000 as of Jan 1, 2023):
- $18 per hour from June 1, 2024, to May 31, 2033.
- $25 per hour starting June 1, 2033.
- Adjustments based on CPI thereafter.
Specified Clinics Meeting Certain Requirements:
- $21 per hour starting June 1, 2024.
- $22 per hour from June 1, 2026.
- $25 per hour from June 1, 2027.
- Adjustments based on CPI thereafter.
Other Covered Healthcare Facility Employers:
- $21 per hour from June 1, 2024.
- $23 per hour from June 1, 2026.
- $25 per hour from June 1, 2028.
- Adjustments based on CPI thereafter.
Certain Licensed Skilled Nursing Facilities Employees:
- $21 per hour starting June 1, 2024.
- $23 per hour starting June 1, 2026.
- $25 per hour starting June 1, 2028.
- Adjustments based on CPI thereafter.
Additionally, this bill mandates that salary-based employees in healthcare must earn a monthly salary equivalent to no less than 150% of the health care worker minimum wage or 200% of the applicable minimum wage (whichever is higher) to qualify as exempt from minimum wage and overtime payments.
Furthermore, specific healthcare employers are required to publish information about their employee count and payor mix by January 31, 2024. A waiver program, allowing temporary pauses or alternative phase-ins of the healthcare minimum wage requirements, will be developed in collaboration with state health care agencies by March 1, 2024.
These changes are reflected in the new Sections 1182.14 and 1182.15 added to the Labor Code.
SB 553 – Workplace Violence, Restraining Orders and Workplace Violence Prevention Plan (Effective July 1, 2024 (Workplace Violence Prevention Plan); January 1, 2025 (Temporary Restraining Orders)
Starting July 1, 2024, SB 553 mandates employers to adhere to the following requirements:
- Develop and maintain an effective workplace violence prevention plan in all work areas, containing specific details.
- Document information related to every workplace violence incident in a violent incident log.
- Provide comprehensive training to employees regarding the workplace violence prevention plan.
- Offer additional training when a new or previously unrecognized workplace violence hazard is identified or when modifications are made to the existing plan.
- Maintain records of workplace violence hazard assessment, evaluation, correction, training, violent incident logs, and workplace incident investigations. Certain records must be accessible to the division, employees, and employee representatives.
From January 1, 2025, SB 553 empowers collective bargaining representatives to seek temporary restraining orders on behalf of employees facing unlawful violence or credible threats of violence at the workplace. Previously, only employers had this authority. Before requesting such an order, employers or collective bargaining representatives must allow affected employees the option to remain anonymous in the request.
Additionally, SB 553 requires Cal/OSHA to establish a workplace violence regulation for general industry by December 31, 2026.
This legislation introduces revisions to the Code of Civil Procedure and the Labor Code. For specific details on the impacted code sections and relevant chapters, please refer to SB 553.
SB 848 – Employment Leave for Reproductive Loss (Effective January 1, 2024)
SB 848 provides an eligible employee, who has worked for the employer at least 30 days, up to five days of “reproductive loss leave” following a “reproductive loss event.” A “reproductive loss event” means the day of, or, for a multiple-day event, the final day of, a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction. Any reproductive loss leave generally must be taken within three months of the event, and pursuant to any existing leave policy of the employer. Employee leave rights are in addition to other leaves under the California Family Rights Act and the Fair Employment and Housing Act.
This bill also provides that if an employee experiences more than one reproductive loss event within a 12-month period, the employer can cap the total amount of reproductive loss leave time at 20 days within a 12-month period. In the absence of an existing employer policy, the reproductive loss leave may be unpaid, but an employee may use certain other leave balances, including accrued and available paid sick leave, during the covered leave.
Finally, SB 848 requires the employer to maintain employee confidentiality relating to reproductive loss leave, and makes it an unlawful employment practice for an employer to retaliate against an individual because of the individual’s exercise of the right to reproductive loss leave or the individual’s giving of information or testimony as to reproductive loss leave.
This bill adds Section 12945.6 to the Government Code.