Last updated: October 2022 – Employment Law Updates for California 2023
In year 3 of the COVID-19 pandemic, California saw a number of new pieces of legislation that address related issues we’ve been dealing with including CA Supplemental Sick Pay, COVID-19 Notices, and a Rebuttable Presumption that a worker’s COVID-19 illness should be covered by workers’ compensation. Additionally, several new laws were enacted that even apply to small employers including protections for Cannabis Users, a new entitlement to Bereavement Leave, employees now being able to take CFRA and Paid Sick Days for a designated Person, employers being required to post Pay Ranges in Job Ads, and the list continues…
New California Employment Laws – The following is a description of most of the more impactful (but not all) new employment laws that unless otherwise stated, will go into effect on 1/1/23:
CA Supplemental Sick Pay – In 2022, California enacted the 2022 COVID-19 Supplemental Paid Sick Leave (SPSL) law that provided employees at employers with 25 or more employees, 40 hours of additional paid sick time off over and above California’s “regular” paid sick leave. Time could be taken off for one of several COVID-related reasons. Additionally, employees could be eligible for another 40 hours of SPSL for a number of COVID-related reasons impacting their family members. CA SPSL was due to expire on 9/30/22. AB 152 extends the availability of CA SPSL through 12/31/22 but does not increase employees’ entitlements, so if they have fully or partially used the total hours available under the prior law, they are not entitled to additional time off.
AB 152 also makes several other changes to SPSL. If an employee tests positive and submits a second diagnostic test within 5 days of that first result and is again positive, the employer can require a third diagnostic test within no less than 24 hours. Additionally, employers no longer have to provide SPSL to an employee who tests positive but refuses to provide documentation or submit to the required testing.
Some very good news is that AB 152 also creates a grant program that will allow employers who have been adversely impacted by Covid 19 to recover up to $25,000.
COVID Employee and Dept of Public Health Notices – AB 2693 which went into effect immediately,made several changes to the notices an employer must provide to employees and others related to COVID-19 cases in the workplace. Under existing law, if an employer receives notice of a potential COVID-19 exposure in the workplace, the employer is required to take specific actions within one business day of the notice, including providing individual written notices to all employees on the premises that they may have been exposed. This law was due to expire on 1/1/23. AB 2693 authorizes an employer to satisfy this notification requirement by prominently displaying a general notice in the workplace that includes the dates on which an employee with a confirmed case of COVID-19 was at the worksite within the infectious period and the location of the exposure. The notice must remain posted for 15 days and takes the place of individual notices to impacted employees that were previously required. Additionally, the employer must maintain a log of the notices posted. This notice requirement is extended until 1/1/24. Existing law also required an employer to notify the local public health agency within 48 hours should the number of COVID-19 cases meet the definition of an outbreak. AB 2693 eliminates this requirement.
Rebuttable Presumption of Workers’ Compensation Coverage and Notice to Work Comp Carrier – In 2020 SB 1159 established a rebuttable presumption that was due to expire on 1/1/23. It covered 1) certain first responders and healthcare workers and 2) employees who work at an employer with 5 or more employees during an “outbreak” at the employee’s “specific place of employment” (which does not include the employee’s home or residence). If an employee tests positive within 14 days of having performed work at the employer’s direction, the employee will be presumed to be eligible for all workers’ compensation benefits which includes hospital, surgical medical, wage replacement, and death benefits. Prior to being eligible for wage replacement benefits, an employee would have to use any other COVID-19 specific paid time off benefits such as CA SPSL. Employers are able to dispute the claim within 90 days by showing that they took measures to reduce the transmission of COVID-19 in the workplace, that the employee had other risks of infection that were not work-related, and through other means such as statements by the employee or other evidence that is typically used when disputing a work-related injury or illness.
For purposes of this law, an “outbreak” is defined as: 1) for employers with 100 or fewer employees – if at least 4 employees test positive at a specific worksite; 2) for employers with more than 100 employees, if at least 4% of their employees test positive at specific worksite; or 3) if the specific worksite is closed by a public health agency due to a risk of infection.
In order to allow the work comp carriers to determine if an outbreak has occurred, SB 1159 created important reporting requirements for employers. Employers who know or who should reasonably know that an employee has tested positive for COVID-19, have 3 business days to report via fax or email the following information to their work comp carrier: 1) That an employee has tested positive (the employee’s name or other Personally Identifiable Information is not to be divulged unless the employee asserts that the infection is work-related); 2) the date of the positive test (the date on which the specimen was collected – not the date of the test results); 3. the address of the employee’s specific place of employment during the 14-day period prior to the positive test; and 4) the highest number of employees who reported to that work location within the 45-day period prior to the last day the employee worked at that location.
AB 1751 extends the rebuttable presumption and workers’ comp reporting requirements through 1/1/24 and lessens the amount of time for a claim to be rejected from 90 days to 30 or 45 days.
Cannabis Use – Up until now, despite cannabis being legal in California under certain circumstances for recreational and medical use, employers have been able to deny or terminate employment based on a positive test for cannabis because marijuana remains an illegal substance under federal law. Following suit with more and more states who are passing laws restricting an employer’s ability to take adverse action against cannabis users, effective 1/1/24, AB 2188 makes the off-duty and off-premises use of cannabis a protected category for employment purposes under California’s Fair Employment and Housing Act. Employers will still be permitted to enforce a drug-free workplace, and can prohibit the use, possession, and being impaired by marijuana while at work. However, the most common and widely available test for marijuana detects the presence of cannabis metabolites in someone’s system, which only proves that the substance has been ingested at some point within the past days, weeks, or months. Tests and/or guidelines to determine current impairment by marijuana are not readily available, leaving employers without a good mechanism to determine if adverse action can be taken.
Contraceptive Equity Act – The Contraceptive Equity Act will make California’s contraceptive equity laws gender neutral. Beginning with plan years starting after 1/1/24, SB 583, will require insurance companies to cover over-the-counter birth control, prohibit deductibles for vasectomies, and extend contraceptive coverage benefits to more individuals. Effective 1/1/23 reproductive decision-making will become a protected category for employment purposes under the California Fair Employment and Housing Act. Employers will as such be prohibited from discriminating against employees based on their personal decisions regarding contraceptives and reproductive health.
Bereavement Leave – In 2021, SB 1383 made employers with as few as 5 employees subject to California Family Rights Act (CFRA). Eligible employees who experience certain family, medical, and military situations must be provided with up to 12 weeks of unpaid, job-protected leave. Effective 1/1/23, AB 1949 makes bereavement leave for the death of a family member a covered reason to take CFRA. Leave for this purpose is available to employees who have at least 30 days of service prior to the death, is limited to 5 days that do not need to be used consecutively, must be completed within 3 months of the date of death, and may be unpaid unless the employer has a policy that otherwise provides for some sort of pay for bereavement purposes. Employers are permitted to require written proof of death and are required to maintain the confidentiality of the request.
Designated Person – AB 1041 expands the definition of “family members” for purposes of employees taking leave under the California Family Rights Act (CFRA) to care for a family member with a serious health condition or for bereavement purposes, as well as for using paid sick leave under California’s Healthy Workplace, Healthy Families Act of 2014 (“regular” paid sick days). Family members under both laws will now include a child, parent, grandparent, grandchild, sibling, spouse, domestic partner, and designated person. A “designated person” is any individual related by blood or whose association with the employee is the equivalent of a family relationship. The designated person may be identified by the employee at the time the employee requests the leave. Employers may limit an employee to one designated person per 12-month period.
Pay Transparency – Effective 1/1/23, SB 1162 requires employers with 15 or more employees to include pay ranges in job postings that are published, announced, posted, or made known by a third party (such as a recruitment firm). It also requires that all employers, regardless of size, provide the pay range for a current employee’s position to that employee upon “reasonable request.” Employers are further required to maintain a record of each employee’s job title and pay history during employment for the 3 years post termination. The bill provides for civil penalties of no less than $100 but not more than $10,000 per violation.
This law also amends the pay data reporting requirements for employers with 100 or more employees that went into effect in 2020. Employers were permitted to provide a copy of their federal EEO-1 report to the CA DFEH to disclose information on headcount, pay, and hours worked based on employees’ race, ethnicity, and sex in each job category. Effective in 2023, all CA employers regardless of whether or not they are required to file a federal EEO-1 report must file a pay data report with the CA Civil Rights Department (CRD, formerly the DFEH). Employers must now also report the median and mean hourly rate within each job category as well as for each combination of race, ethnicity, and sex. Employers may no longer submit a copy of their EEO-1 report to comply. Of note is that the categories to report sex for the CA report are male, female, and non-binary. As “non-binary” is not a formal classification in the federal EEO-1 report nor on the EEO voluntary self identification form, CA employers will need to be sure to gather and report data based on these 3 classifications. For employers who have 100 or more workers through a labor contractor, a separate report must be submitted for those workers. Employers with multiple establishments cannot file a combined report and must submit a separate report for each company. The filing deadline that was previously in March is being moved to the second Wednesday in May of each year. Failure to report can result in a civil penalty of up to $100 per employee for first offenses and $200 for subsequent offenses.
Emergency Conditions – SB 1044 prohibits an employer from taking or threatening adverse action against an employee who leaves, or refuses to report to, a worksite under an “emergency condition” if the employee feels unsafe. Emergency condition is defined as conditions of disaster or extreme peril to the safety of persons or property at the worksite caused by natural forces or a criminal act or an order to evacuate a worksite, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act. Interestingly enough, the law spells out that a health pandemic is not considered an emergency condition. Employers are further restricted from preventing an employee from accessing a personal mobile device to seek emergency assistance, to assess the safety of the situation, or to communicate with another person about their safety. Employees must notify the employer of the emergency condition in question. The provisions of the law no longer apply once the emergency condition has ceased and does not apply to a long list of categories of workers that include first responders, certain healthcare, and disaster service workers.
Paid Family Leave Benefits – SB 951 will increase the amount employees can receive in wage replacement benefits when they take time off to care for family members. This program is funded by a payroll tax deducted from California employees’ paychecks. In 2025, lower-income workers will be eligible for approximately 90% of their regular pay and other workers 70%. For 2023 and 2024, the benefit amounts will remain capped at approximately 70% and 60% respectively.
DFEH Name Change – Effective 7/1/22 SB 189 changes the name of the California Department of Fair Employment and Housing to the California Civil Rights Department (CRD). Over the next year, there will be changes to its website, posters, brochures, pamphlets, etc. Employers will need to make sure they begin using these new documents once they become available.
California Consumer Privacy Act (CCPA) – The CCPA is a complex law that provides a comprehensive set of rights to consumers with regards to their personal information. As a general rule, the law applies to 3 categories of for-profit companies 1) with gross annual revenues of $25 million or more; 2) that buy, receive, or sell personal information of 100,000 CA household residents or devices; and 3) that derive 50% of more of annual revenue from selling consumers’ personal information.
Since its enactment, there have been several measures that exempted HR information collected by an employer. Despite efforts to extend this exemption, no such laws were passed in 2022. As such, effective 1/1/23, CA employers covered by the CCPA need to be prepared to comply with this law. Note that the CCPA has a broad territorial reach and is not limited only to businesses in California. Employers will need to know how to treat employee data, what data to collect, how long to retain data, and how this law intersects with other laws that have certain data retention requirements. Employers will need to disclose to employees what data is being retained, establish a system to manage assessing and correcting information, and provide training to staff. The CCPA also provides employees with a right to delete certain information which could be problematic for an employer attempting to maintain records related to inappropriate behavior. Employers should contact legal counsel experienced in this very new area of the law in order to get ready.
Minimum Wage and Exemptions – Although SB3 passed in 2016, it provided for an annual increase in our minimum wage. Currently employers with 25 or fewer employees must pay employees no less than $14.00 per hour. Employers with 26 or more employees must pay no less than $15.00 per hour. Although the law originally provided for employers of all sizes to move to a $15.00 per hour minimum wage effective 1/1/23, the governor has the ability based on certain determinations to adjust these numbers. Given the recent level of inflation in the state, the new minimum wage for employers of all sizes will be $15.50 per hour effective 1/1/23. From this point on, the minimum wage will be readjusted each year based on the consumer price index (CPI) again subject to modification by the governor.
As a reminder, in California, minimum wage has an impact on more than just the employees who earn at that level. In order to be exempt from overtime, an employee must have job responsibilities that meet certain legal requirements and must generally be paid a salary that is at least twice minimum wage for the equivalent of full-time work. This now means that the minimum salary requirement for exempt employees will be $64,480 per year.
Note that for exempt computer professionals may be paid no less than $53.80 per hour; $9,338.79 per month, or $112,065.20. Exempt licensed physicians and surgeons may be paid no less than $97.99 per hour. For more information on exemptions, see Vantaggio’s Info Bulletins Exempt vs. Non-Exempt General Guidelines – California and Special Exemptions Classification Rules – California
Additionally, minimum wage has an impact on determining if insides sales employees are exempt and when certain trade employees can be required to provide their own hand tools.
Also keep in mind that close to 40 different cities and other municipalities in California have their own minimum wage ordinances.
Industry-Specific Legislation – As is common practice in California, a number of new laws were passed this year that impact employers in specific industries:
- Fast Food Accountability and Standards Recovery Act – AB 257 authorizes the creation of the Fast Food Council, comprised of representatives from labor and management, to set minimum standards for workers in the industry, including for wages, conditions related to health and safety, security in the workplace, the right to take time off from work for protected purposes and protection from discrimination and harassment.
- Call Center Employers – AB 1601 requires employers of customer service employees in a call center to follow the California Worker Adjustment and Retraining Act (Cal/WARN) prior to relocating a call center even if the move is to a foreign country. The new law applies to commercial or industrial facilities operating a call center that employ or have employed within the preceding 12 months, 75 or more workers.
- Farmworkers Union – AB 2183 implements an easier process for forming unions.
What should employers do?
- Develop or update your CFRA Policy, Leave Administration Forms, and Medical Certifications.
- Update Employee Handbooks for: CFRA, bereavement leave, designated persons, emergency conditions, cannabis, protected categories, etc.
- Ensure you are providing Supplemental COVID-19 Sick Leave to eligible employees\ through the end of this year.
- Apply for a SCSL $50,000 Grant to reimburse any SCSL you may have already provided!
- Continue reporting COVID-19 Positive Test data to your Workers’ Compensation Carrier.
- Amend your COVID-19 Employee Notification protocols for informing employees of positive tests by developing a posting mechanism and procured.
- Ensure you are ready for the new Reporting Employee Information and Pay Data to the CRD (formerly DFEH) by 5/10/23.
- Review your current Drug Testing protocols and decide on when and how you will amend policies and procedures related to Cannabis Testing.
- Prepare to include Pay Ranges in new Job Postings and to provide to current employees who request.
- Ensure all employees are being paid the correct Minimum Wage and that all exempt employees are paid the new minimum salary requirements. It would also be a good time to do an Exempt/Non-Exempt audit of your employees to ensure proper classification.
- Obtain and post your new 2023 Employment Posters. Click here to order via Vantaggio’s online store. We anticipate 2023 posters being available by mid January.
- Talk to your attorney to get guidance on compliance with the California Consumer Privacy Act.
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