Increased Statewide Minimum Wage
Beginning January 1, 2024, all employers operating in California will be required to pay a minimum wage of $16 per hour, regardless of their size. Note that several cities in California, such as Los Angeles, Santa Monica, San Francisco, and West Hollywood, have their own minimum wage requirements that exceed the state minimum wage. It’s important for employers to comply with the law that provides the highest minimum wage to their employees.
When the state minimum wage increases, it affects not only minimum wage workers but also those who have been classified as exempt salaried workers. This is because exempt salaried workers must be paid a base salary that is at least twice the state minimum wage for full-time employment, which means that they too will also see a pay increase. From January 1, 2024, most exempt salaried workers must be paid no less than $66,560 annually to maintain their exempt status. If an employee has been misclassified as exempt, including because their salary is below this threshold, they have the right to seek damages and penalties for unpaid overtime, missed meal and rest breaks, interest, and attorney’s fees.
Increased Paid Sick Leave Requirements
For the past decade, employers in California have been obligated to provide their employees with at least 3 days or 24 hours (whichever is greater) of paid sick leave per year under the Healthy Workplaces, Healthy Families Act of 2014. Starting from January 1, 2024, there will be a new law in effect which will require employers to provide a minimum of 5 days or 40 hours of paid sick leave per year to their employees.
When employers require their employees to accrue paid sick leave instead of getting it all at once every year, they must allow any unused time to carry over to the next year, as long as it doesn’t exceed a certain amount. Previously, the cap was 48 hours or 6 days, whichever was greater. However, the new law states that the minimum accrual cap must be 80 hours or 10 days, whichever is greater. This rule applies to all employees, including part-time workers.
It’s important to note that in California, many cities require employers to offer more sick leave to their employees than the state law mandates. For instance, if you work hourly in the City of Los Angeles, you are entitled to 48 hours of paid sick leave per year. However, the City of Los Angeles allows employers to cap the accrual of sick leave at 72 hours. Starting January 1, 2024, this accrual cap will no longer be compliant with California law. Therefore, employers who have policies with a 72-hour cap in the City of LA should review their policies and practices to ensure they are compliant with state law.
New Mandatory Unpaid Reproductive Loss Leave (applicable to employers with 5+ employees)
Eligible employees may now take up to 5 days of unpaid bereavement leave for the death of a family member, under the new bereavement leave law effective January 1, 2024.
Starting from January 1, 2024, a new law will entitle eligible employees to take up to 5 days of leave due to a reproductive loss event. The term “reproductive loss event” refers to a failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction, as defined by law. To be eligible, an employee must have worked for the employer for at least 30 days.
The employee who has experienced a reproductive loss event must take the leave within 3 months of the event, and it doesn’t have to be taken at once. The leave can be unpaid, or the employee can use their accrued and unused vacation or sick leave. If the employee experiences more than one reproductive loss event in a 12-month period, they can take a maximum of 20 days of unpaid reproductive loss leave for that period.
Anti-Discrimination Laws Extended to Protect Cannabis Users (applicable to employers with 5+ employees)
Starting from January 1, 2024, California employers will be prohibited by the Fair Employment and Housing Act (FEHA) from discriminating against employees for their off-duty and off-premises use of cannabis, including non-psychoactive cannabis metabolites found in their bodies due to drug tests. However, employees can still be forbidden from possessing, using, or being impaired by cannabis while on the job. Additionally, employers can still carry out drug tests, but it should not include screening for non-psychoactive cannabis metabolites. It is important to mention that this law will not apply to employees in building and construction trades. Furthermore, this law also doesn’t apply to those hired for positions that require federal government background investigations.
Workplace Violence Prevention Plan
Starting July 1, 2024, the majority of employers in CA will be required by SB 553 to create a written workplace violence prevention program. This program should consist of a written plan and training for employees on various topics, including but not limited to:
- Procedures for allowing employees to participate in developing and implementing the workplace violence prevention plan, which includes identifying hazards, evaluating and correcting them, designing and implementing prevention training, and reporting and investigating incidents of violence in the workplace.
- Procedures for accepting and responding to reports of workplace violence, as well as prohibiting retaliation against reporters of workplace violence.
- Procedures for communicating with employees regarding workplace violence matters and alerting them of workplace violence emergencies.
- Procedures for identifying and assessing hazards and concerns related to workplace violence.
Employers will have to maintain a record of all incidents of workplace violence as a mandatory requirement.
There are some employers who are not required to comply with these obligations. These include some healthcare facilities, as well as workplaces where there are less than 10 employees working at any given time and which are not open to the public.
Expansion of Restrictions on Non-Compete Agreements
California has prohibited employers from including provisions in employment agreements that forbid employees to work for their competitors (known as “non-compete agreements”) after they leave their job, except for a few rare exceptions. Recently, the Governor signed two new laws that impose additional obligations.
SB 699 reaffirms that, in California, the majority of noncompete agreements are considered void. Additionally, it prohibits employers from trying to enforce these agreements on current or former employees, regardless of whether the employee signed the agreement while living and working in a state that allows noncompete provisions. To clarify, if a California employer hires an employee who had previously signed a non-compete agreement while residing and working out-of-state for an out-of-state employer, and if the employee later moves to California, then the employer may not be able to enforce the non-compete agreement as per the California law. In addition, if an employee has signed a permissible noncompete agreement while living and working out-of-state, and later moves to live and work in California, that non-compete agreement may not be enforceable for that employee. This statute can be interpreted to prohibit California employers from requiring non-compete agreements for out-of-state employees, even if such agreements are allowed in the state where the employee is working.
The passing of this law may face challenges as it can be interpreted as infringing on the authority of lawmakers in other states to decide on the scope and impact of their own state laws. However, until there is more clarity, it is advisable for employers to be cautious as violations may result in lawsuits, damages, injunctive relief, and the possibility of being liable for the employee’s attorney fees and costs.
Under AB 1076, employers with noncompete provisions in their agreements are required to inform all current and former employees who were employed as of January 1, 2022, in writing by February 14, 2024, that the noncompete clause or agreement is no longer in effect.
Written Agreements Required for Freelancers/Independent Contractors in the City of Los Angeles
California law has a narrow definition of who can be classified as an independent contractor instead of an employee. However, for the few workers who are considered freelancers or independent contractors and work within the City of LA, they are protected by the Freelance Worker Protections Ordinance. Effective July 1, 2023, this ordinance requires, among other things, the following mandates:
In cases where an individual or entity, without employees, provides services worth at least $600 to an entity that is engaged in business or commercial activity, both parties are required to enter into a written contract. The contract must include a detailed description of the services to be performed, the rate and method of compensation, and the payment date or the method of determining the payment date, among other things. When a date isn’t specified in the contract, the payment for services rendered should be made within 30 days. Both the hiring entity and freelance worker are required to keep records of their contracts, payments made, and any other documents that demonstrate compliance for at least four years.
Increased Minimum Wage for Many Workers in the Health Care Industry
The passing of a new law will have significant implications for a wide range of workers in the healthcare industry. Among those who will be affected are not only physicians, nurses, and caregivers, but also janitors, guards, clerical staff, and food service workers.
The Legislature has established a new hourly and salary wage framework applicable to “covered health care employees” defined as “An employee of a health care facility employer who provides patient care, health care services, or services supporting the provision of health care, which includes, but is not limited to, employees performing work in the occupation of a nurse, physician, caregiver, medical resident, intern or fellow, patient care technician, janitor, housekeeping staff person, groundskeeper, guard, clerical worker, nonmanagerial administrative worker, food service worker, gift shop worker, technical and ancillary services worker, medical coding and medical billing personnel, scheduler, call center and warehouse worker, and laundry worker, regardless of formal job title.” This definition can also be considered to include independent contractors.
The statute provides a definition of “covered health care facility” which encompasses a total of 20 different categories of facilities. These categories include, but are not limited to, various types of clinics such as psychology, surgical, and rehabilitation clinics, as well as physician groups, general acute care hospitals, home health agencies, licensed residential care facilities for the elderly, and any facility or work site that is part of an integrated health care delivery system.
The statute sets minimum wage schedules for covered health care employees of covered health care facilities. These schedules are higher than the minimum wage set by the state of California and most cities in California. The earliest that the new minimum wage will go into effect is June 1, 2024. On that date, the minimum wage will range from $18 to $23 per hour, depending on the specific health care employer.
The rise in minimum wage will have a significant impact on both hourly and salaried exempt workers. In order to maintain their exempt status, salaried employees must earn a minimum salary that is either 150% of the applicable health care worker minimum wage or 200% of the applicable state-wide minimum wage, whichever is greater, for full-time employment.
It is anticipated that the Department of Health Care Access will release additional guidance on its official website on or prior to January 31, 2024.
Increased Minimum Wage for Fast Food Workers
Starting from April 1, 2024, all fast food workers in the state will be entitled to a minimum wage of $20 per hour. This change will affect employers who are part of a “national fast food chain.” A national fast food chain refers to a group of limited-service restaurants with more than 60 locations across the country that share a common brand, standardized decor, marketing, products, and services.
Compensation and Reimbursement Required for Food Handlers
Current legislation mandates that certain employees involved in the preparation, storage, or serving of food in food establishments must possess a valid food handler card. A new law is set to be implemented, which will require employers to compensate workers for the completion of the necessary training and examination required to obtain such a card. Additionally, employers must reimburse employees for any expenses incurred during the process of obtaining the card. Furthermore, it will be illegal for employers to make employment contingent upon the applicant or employee already possessing a food handler card.
Please note that the information provided on this website is for general information purposes only and is not to be construed nor relied upon as legal advice nor the formation of an attorney-client relationship. For a free consultation with Attorney Thomas M. Lee, please contact us.
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