Each year, the California Legislature and Governor Newsom enact new laws that employers need to be aware of and prepare for before the new year arrives. This year was no different. Below are the top legislative topics to know and prepare for in advance of 2024.
- Minimum Wage Continues to Rise: The minimum wage was a hot topic this year. First, the basic minimum wage that applies to nearly every employer in the state is increasing to $16.00/hr beginning January 1, 2024. California employers must also keep in mind that the salary test for the primary overtime exemptions in California is pegged at two times the minimum wage. Therefore, this minimum wage increase to $16 also increases the salary test floor for the California professional, administrative, and executive exemptions to $66,560 annually or $1,280 weekly. In addition, California has created a new minimum wage for Health Care Workers and set the stage for an increase in the minimum wage for Fast Food Workers. California recently enacted Senate Bill 525, adding sections 1182.14 and 1182.15 to the California Labor Code and substantially raising the base minimum wage for health care workers. The new law also expands the definition of covered “health care” positions to include virtually any employee who works in the health care setting. The minimum wage for all healthcare employees will ultimately increase to $25 per hour, with the first increase above the general state minimum wage to occur on June 1, 2024. The rate at which the minimum wage increases take effect will vary depending upon the size and nature of the employer. Fast food employees will similarly see an increase in the minimum wage as a result of a legislative agreement reached between organized labor and management. The basic takeaways of AB 1228 include that, effective April 1, 2024, the hourly wage for most fast-food and fast-casual restaurant workers increases to $20 per hour, with the Fast Food Council to set annual wages thereafter beginning in 2025 and through 2029, subject to a yearly increase cap tied to the Consumer Price Index.
- Reproductive Loss Leave: SB 848 amends the California Government Code to require private employers with five or more employees (and public employers of any size) to provide protective time off (up to five days) to California employees for a “reproductive loss event.” The term “employee” is defined to mean any person employed by the employer for at least 30 days. “Reproductive loss event” is defined to mean a failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction.
- California Expands Paid Sick Leave: All California employers are currently required to provide three (3) days or 24 hours of paid sick leave (“PSL”). The Legislature has increased the annual amount of PSL an employee is entitled to under either the frontload or accrual method from 24 hours or three days to 40 hours or five day.
- California Employers Must Develop a Workplace Violence Prevention Program Under New Law: By July 1, 2024, all employers are required to create and implement a written Workplace Violence Prevention Plan, train employees and supervisors on workplace violence matters, create and maintain a violent incident log, and keep records of all training and violent workplace incidents that occur.
- California’s Further Elimination of Non-Compete Provisions/Agreements: California’s Business and Professions Code section 16600 already declares California’s fundamental public policy against provisions that restrict individuals from engaging in lawful competition. California passed two new laws designed to further prohibit the use of/enforceability of non-competes in the Golden state. SB 699 prohibits employers from entering into noncompete agreements that are void under California law. In fact, an employer that enters into or seeks to enforce an unlawful noncompete will commit a civil violation once the new law takes effect on January 1, 2024. Before the adoption of SB 699, lawsuits in California to invalidate noncompetes have focused on declaratory relief. Under the new law, however, employees are entitled to new remedies when suing employers who attempt to implement or enforce unlawful noncompete agreements. Specifically, employees can seek damages, injunctive relief, and even reasonable attorneys’ fees and costs. Significantly, there is no counterpart attorneys’ fee provision for employers who prevail in litigation over SB 699. The second law is AB 1076, which expressly codifies existing caselaw that explained that any noncompete in the employment context, no matter how narrowly tailored, is void. This new law further clarifies that California’s invalidation of noncompete agreements is not limited to contracts where the person being restrained from engaging in a lawful profession, trade, or business is a party to the contract. Additionally, AB 1076 creates a new notice requirement for employers. Once the law takes effect, employers will need to notify current and former employees whose contracts included an unlawful noncompete that such noncompetes are void. The notice would need to be contained in a written individualized communication to the employee or former employee, and delivered to their last known address and email address. A failure to send these notices would be a violation of California Unfair Competition Law, which can carry civil penalties.
Employers will only have a few months to comply with this new notice requirement, which requires notice by February 14, 2024.
- Indoor Heat Illness Regulations: California becomes the first state to create standards to monitor and control, if feasible, the heat indoors. The proposed indoor regulation (found here) is triggered whenever the inside temperature or heat index of a building or other enclosed structure reaches 82 degrees F. Additional temperature monitoring and control requirements are triggered whenever the temperature reaches 87 degrees, or, 82 degrees if the employee is wearing clothing that restricts heat removal or the employee works in a high radiant heat area.
- New Requirements For Considering Criminal History in Employment: California’s revised regulations add to the already long list of procedures that must be followed when a California employer is going to use criminal history as a basis for rejecting an applicant or taking other adverse actions against an applicant or employee.
Several of these new laws will likely require employers to update their policies to ensure they remain compliant with California law. As always, please do not hesitate to contact me if you wish to discuss these laws or ascertain the impact on your California operations and workforce.