New Laws That Take Effect on January 1, 2024
SB 616 (Paid Sick Leave)
SB 616 significantly expands California’s existing state paid sick leave law and provide more generous paid sick leave terms to employees. Under SB 616, an employee is now entitled to a minimum of 5 days or 40 hours of paid sick leave (up from 3 days or 24 hours under prior law).
Employers may still utilize an accrual method that allows employees to accrue paid sick leave at the rate of 1 hour for 30 thirty hours worked. But, under SB 616, the employer’s accrual policy must be generous enough to allow an employee to accrue 24 hours of paid sick leave by their 120th day of employment and 40 hours by their 200th day of employment. Alternatively, employers may still “frontload” the entire amount of paid sick leave; however, under SB 616, the frontloaded paid sick leave amount must now be 5 days or 40 hours (up from 3 days or 24 hours under prior law).
Now, after SB 616, if an employer’s paid sick leave policy terminates the employee’s accrual rights once the employee has hit a “cap” of accrued and unused leave, that cap must now be at least 80 hours or 10 days per year (up from 48 hours or 6 days under prior law). In addition, if an employer’s policy limits how much paid sick leave an employee can use in a year, that limit must now be at least 40 hours or 5 days per year (up from 24 hours or 3 days under prior law).
The Labor Commissioner’s office just posted new FAQs about SB 616. You can read those here.
You can read SB 616 here.
AB 1076, SB 699 (Non-Compete Agreements)
Non-compete agreements have been illegal in California for years; however, that did not stop employers from trying to devise workarounds to circumvent the law. The California legislature has now put an end to some of those tactics.
AB 1076 clarifies existing law and confirms that it is “unlawful” for an employer to include a non-compete clause in an employment contract or to require an employee to enter into a non-compete agreement unless one of the narrow exceptions under Business & Professions Code Section 16600 applies. In addition, if an employer previously required an employee after January 1, 2022 to sign a contract that included an illegal non-compete, AB 1076 requires the employer to notify the employee that the non-compete clause in their contract is void and unenforceable. Under AB 1076, the employer’s failure to provide this notice constitutes “unfair competition” under Business & Professions Code Section 17200.
SB 699 further strengthens the state’s ban on non-competes. Under SB 699, a non-compete agreement is void and unenforceable in California regardless of (a) the state in which the agreement was signed, and/or (b) the state in which the employee worked. SB 699 also creates a specific right of action that allows employees to sue employers who utilize illegal non-compete agreements.
You can read AB 1076 here and SB 699 here.
SB 848 (Leave of Absence for Reproductive Loss)
SB 848 allows eligible employees to take up to 5 days of unpaid leave following a “reproductive loss event.” The law defines a “reproductive loss event” as “the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.”
Under SB 848, an employee who experiences a “reproductive loss” and wishes to take this new leave must (a) work for an employer with at least 5 employees, and (b) be employed with that employer at least 30 days prior to the commencement of the leave. If an employee experiences more than one “reproductive loss” within a 12-month period, the employer is required to provide the affected employee with up to 20 days of unpaid leave. Under SB 848, leave taken due to a “reproductive loss” is not required to be taken on consecutive days; however, the leave must be completed within 90 days of the qualifying loss event.
You can read SB 848 here.
AB 2188 (Cannabis Drug Test Results)
AB 2188 makes it unlawful for an employer to take adverse employment action against an applicant or employee for: (1) off-duty cannabis use away from the workplace; or (2) the results of an employer-required drug screening test that finds non-psychoactive cannabis metabolites in the applicant’s or employee’s hair, blood, urine, or other bodily fluids.
In other words, under AB 2188, if the employer makes the applicant or employee take a drug screening test, and if all that test does is check for past marijuana use, a positive test result cannot be the basis for any adverse employment action against that applicant or employee. The policy behind the new law is that the non-psychoactive components of cannabis can remain in the body for weeks after use. As a result, a positive test says nothing about the person’s current impairment on the job.
AB 2188 does not allow employees to possess or use marijuana on the job. Nor does it interfere with an employer’s right to maintain a drug-free and alcohol-free workplace. An employer may still refuse to hire an applicant based on scientifically valid testing that checks for the presence of the psychoactive component of cannabis THC.
There are two key exceptions to this, however, stated in the new law. If any of the following apply, then AB 2188 does not protect the employee from adverse employment action:
— If another state of federal law requires applicants or employees for this particular position be tested for controlled substances as a condition of (i) employment, (ii) receiving federal funding or federal licensing benefits, or (iii) entering into a federal contract.
— If the applicant or employee was hired for a position that requires a federal government background investigation or security clearance in accordance with regulations issued by the United States Department of Defense pursuant to Part 117 of Title 32 of the Code of Federal Regulations, or equivalent regulations applicable to other agencies.
You can read AB 2188 here.
SB 700 (No Employer Inquiries into Prior Cannabis Use)
SB 700 makes it illegal under California’s Fair Employment and Housing Act (“FEHA”) for an employer to request information from an applicant about the applicant’s prior use of cannabis, including the applicant’s criminal history. There is one important exception to SB 700; namely, that SB 700 does not prevent an employer from requesting information about past cannabis use when the employer is legally permitted or required to inquire about prior drug use.
You can read SB 700 here.
SB 951, Part 1 (New SDI Taxes)
To pay for the increased PFL and SDI payouts to employees starting in 2025 (see discussion under SB 951, Part 2 below), SB 951 eliminates the cap on employee wages subject to SDI taxes. Under existing law, once an employee’s wages hit $153,164, the employee’s obligation to pay SDI taxes stopped for the remainder of the year. But SB 951 removes this annual wage cap and, thus, forces high-earning employees to pay SDI taxes on 100% of their earnings.
You can read SB 951 here.
SB 723 (Rehire of Laid Off Employees)
Since 2021, California law has required certain employers in the hospitality and building services industries to rehire employees who were laid off due to the COVID-19 pandemic. That law was due to expire on December 31, 2024, but SB 723 now extends this law until December 31, 2025. SB 723 also redefines and expands the term “laid off employee” to include an employee who was (1) employed for at least six months and (2) separated on or after March 4, 2020 due to a public health directive, government shutdown order, lack of business, a reduction in force, or other non-disciplinary reasons. In other words, a COVID-19 connection is no longer required to have re-hire rights in California. As a result of SB 723, a covered employer will now have to offer a newly created position to any covered employee who was laid off for any non-disciplinary reason on or after March 4, 2020.
You can read SB 723 here.
SB 497 (Presumption of Retaliation)
SB 497 amends California
Labor Code Sections 98.6, 1102.5, and 1197.5 to create a rebuttable presumption of retaliation if an employee is disciplined or discharged within 90 days of the employee either (a) invoking, or assisting in the enforcement of, specified Labor Code provisions, and/or (b) exercising his/her/their rights under the Equal Pay Act. SB 497 also directs that, in addition to legal damages, an employee who suffers presumed retaliation is also entitled to a “civil penalty” of $10,000. These changes to existing law make it easier for employees to successfully sue their employers for retaliation.
You can read SB 497 here.
AB 594 (Public Prosecutors May Now Enforce the Labor Code)
Existing law allows the California Labor Commissioner to sue to enforce most aspects of California’s wage-and-hour laws. Under SB 594, “public prosecutors” are now empowered to enforce California’s wage-and-hour laws as well. This means that the state’s Attorney General as well as local district attorneys, city attorneys, county counsel, and any other city or county prosecutor can now bring lawsuits against employers who fail to comply with California’s wage-and-hour laws. In addition, SB 594 further provides that the Labor Commissioner and all newly empowered “public prosecutors” will not be bound by any arbitration agreement between the employees and the employer – thus, new lawsuits can be brought by the Labor Commissioner and these “public prosecutors” in court.
You can read AB 594 here.
SB 476 (Employers Must Pay for Food-Handler Cards)
Under existing law, restaurant servers and other food handlers were required to obtain a food handler card and to pay for the testing, training, and other costs of obtaining that card themselves. Now, under SB 476, restaurants and other foodservice employers will have to pay their employees for all costs associated with obtaining their food handler cards, including the time required to complete the training, the cost of testing, and any other costs associated with the certification program. SB 476 also requires employers to relieve an employee of all work duties while the employees take his/her/their training course and examination. Finally, SB 476 prohibits employers from conditioning employment on an applicant already having an existing food handler card.
You can read SB 476 here.
New Laws That Take Effect Later in 2024 or 2025
AB 1228 (Increased Minimum Wage for Fast Food Workers)
Effective April 1, 2024, AB 1228 increases the minimum wage for employees of fast-food chain restaurants with more than 60 locations nationwide to $20 per hour. AB 1228 also establishes the Fast Food Council within the Department of Industrial Relations to oversee future wage increases and recommend other fast-food workplace standards to state agencies.
You can read AB 1228 here.
SB 525 (Increased Minimum Wage for Healthcare Workers)
Effective June 1, 2024, SB 525 increases the minimum wage for the majority of California’s healthcare employees and requires hospital wages to progressively increase to $25 per hour by June 1, 2026. SB 525 sets minimum standards for both hourly and salaried employees and provides employees with a right to sue to enforce these standards. Additional information, including a list of healthcare facilities and hospitals to which the law applies, is expected to be available by January 1, 2024, on the Department of Health Care Access and Information’s website (https://hcai.ca.gov).
You can read SB 525 here.
SB 553 (Workplace Violence Prevention)
Effective July 1, 2024, SB 553 requires California employers to adopt comprehensive workplace violence prevention plans, either as part of their injury and illness prevention programs or as a separate document. In addition, SB 553 requires California employers to:
- Maintain a “violent incident log” that documents workplace incidents or threats.
- Provide workplace violence prevention training to all employees.
- Have a written Workplace Violence Prevention Plan.
You can read SB 553 here.
SB 951, Part 2 (Increased PFL and SDI Insurance Benefits)
Effective January 1, 2025, SB 951 revises the formulas used to calculate Paid Family Leave and State Disability Insurance benefits for lower-income workers. Under SB 951, employees who earn 70% or less than the state’s average wage will receive 90% wage replacement when taking SDI or PFL leave; higher earners will receive 70% wage replacement when taking these leaves. To pay for these new, increased benefits payments to California employees, the state has removed the wage limit on SDI taxes (see discussion of SB 951, Part 1 above).
You can read SB 951 here.
SB 54 (Mandatory Diversity Disclosures VC Firms)
Effective March 1, 2025, SB 54 requires venture capital (“VC”) firms with connections to California to report to the California Civil Rights Department (“CRD”) on the diversity of the founding members of companies in which they invest. In addition, SB 54 requires VC firms standardized survey to be created by the CRD in order to report this information. Under SB 54, a VC firm has “connections” to California if the firm is headquartered in California, has significant presence or operational office in California, has venture capital investments in California businesses, and/or has investments from a person who is a California resident.
You can read SB 54 here.
Wow, we’re used to a lot of new laws here in California, but that’s a crazy long list this year — just in time for the holidays!
