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With the new year fast approaching, we take this opportunity to advise California employers of upcoming legal changes taking effect January 1, 2024.
State Minimum Pay/Wage Increases
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The state minimum wage will increase to $16.00 per hour.
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Note: Many cities have their own minimum wage that is higher than the state minimum wage.
Updates to State Leave Policies
Reproductive Loss Leave: California requires covered employers to provide up to five days of leave to eligible employees following a “reproductive loss event,” which is defined 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.” Leave may be unpaid unless an applicable policy states otherwise.
Paid Sick Leave: Amendments to the Healthy Workplaces, Healthy Families Act expand the amount of paid sick leave available to eligible employees from three days to five days (or 40 hours) for full-time employees. The amendments also impact accrual, carryover, and frontloading, as well as existing paid sick leave policy requirements, extend some protections to employees covered by a collective bargaining agreement and preempt local laws for certain provisions.
Additional General Employment Law Updates
Prosecution of Labor Law Violations: From January 1, 2024 until January 1, 2029, a new law allows public prosecutors to civilly and criminally prosecute labor law violations. The law further provides that prosecutors may prosecute such violations even in the presence of arbitration agreements and agreements prohibiting representative actions.
Off-Duty Cannabis Use Discrimination Prohibited: Employers are prohibited from discriminating in hiring, termination or terms and conditions of employment based on:
- An individual's use of cannabis off the job and away from the workplace; or
- An employer-required drug screening test that has detected non-psychoactive cannabis metabolites.
Certain exceptions apply, and employers remain free to maintain a drug- and alcohol-free workplace and conduct scientifically valid preemployment screening, provided that it does not screen for non-psychoactive cannabis metabolites.
Non-Compete Agreements and Notice Requirements: A new California law clarifies that noncompete agreements that are void under California state law also are unenforceable, regardless of where or when the contract was signed; and whether the work is performed outside of the state. The law also creates a private cause of action against any employer, and in addition to injunctive relief and actual damages, an employee may recover attorneys’ fees and costs, if successful.
Employers must also notify current and former employees (employed after January 1, 2022) by February 14, 2024 that any noncompete clause covered by the law is void. The notice must be in writing and delivered to the last known physical address and email address of the employee.
Unemployment Insurance Notice: Any California employer required to provide unemployment insurance to its employees is required to notify all workers about their potential eligibility for the Voluntary Income Tax Assistance program and CalFile, in addition to notice that is already required for the federal and state earned income tax credits. The notice generally must be provided to workers together with their annual wage summaries, as well as during the month of March in the same year and must include certain language and information.
Sexual Assault, Harassment or Discrimination Privilege: Communications made by an individual regarding an incident of sexual assault, harassment or discrimination in the context of a defamation action are protected and cannot form the basis of claims of libel or slander. To qualify as privileged, the communication must: (1) be made without malice; (2) concern factual information related to incidents of sexual assault, harassment or discrimination experienced by the individual making the communication; and (3) be made by an individual that has, or at any time had, a reasonable basis to file a complaint of sexual assault, harassment or discrimination (regardless of whether the complaint was filed ).
Equal Pay Anti-Retaliation Protection: An amendment to existing California law creates a presumption of retaliation if an employee is disciplined or discharged within 90 days of engaging in certain protected activity, including disclosing an employee’s own wages, discussing, or inquiring about the wages of others, making a written or oral complaint regarding owed unpaid wages, or aiding or encouraging any other employee to exercise their rights under the law. Employers are liable for a civil penalty of up to $10,000 per employee for each violation, to be awarded to the employee who experienced retaliation.
State Disability Insurance Limit: California has eliminated the state disability insurance (SDI) taxable wage limit, making all covered wages subject to SDI contributions.
Tobacco Use in Lodging Establishments: California prohibits tobacco products in 100 percent of guest room accommodations in all hotels, motels, or similar transient lodging establishments. This eliminates the prior exception to the state smoking that permitted smoking in 20 percent of guest rooms.
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