With the close of the 2023 California legislative session, it is time to take a look at a few of the most important new and updated employment laws to ensure your business is prepared and compliant for the new year.

Expanded Leave Protections

SB 616 – Increase in Paid Sick Days Accrual and Use[1]

Under existing law, employers are required to provide a minimum of 3 days (or twenty-four hours) of paid sick leave each year. Additionally, employees are entitled to accrue 6 days (or forty-eight hours) of paid sick leave which may be carried over from one year to the next.

Beginning in 2024, the minimum required number of paid sick leave days provided annually is increased to 5 days (or forty hours). Further, the paid sick leave accrual threshold is increased to 10 days (or eighty hours).

Alternatively, employers who choose to provide the full 5 days of paid sick leave upfront, as opposed to requiring employees to accrue them throughout the year, are not required to allow carryover of those days to the following year.

Keep in mind that there may be county, city, or local rules or ordinances requiring additional sick leave beyond the minimum state requirements. 

SB 848 – Unpaid Leave for Reproductive Loss[2]

In January 2023, California began requiring employers to provide up to 5 days of unpaid leave to an employee who lost a family member.  In 2024, California will also require employers to provide employees up to 5 days of unpaid leave following a reproductive loss event, and up to 20 days in aggregate for the year. 

However, unlike the aforementioned bereavement leave law, an employer may not request documentation to confirm the reproductive loss event. A reproductive loss event is defined as a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.

Expanded Prohibition on Noncompete Agreements

Under existing law, contractual provisions which restrain an employee from engaging in a lawful profession, trade, or business of any kind are void. The legislature passed expanded protections for 2024, meaning employers should take the time now to review all current and former employment contracts to ensure compliance.

SB 699 – Noncompete Agreements Unenforceable[3]

This bill establishes that any such noncompete agreements void under California law are unenforceable regardless of where and when the contract was signed. This includes contracts signed and employment maintained outside of California. Further, where an employer violates this law, a current or former employee may bring an action seeking injunctive relief and actual damages as well as reasonable attorney’s fees and costs.

AB 1076 – Notice Requirements[4]

By February 12, 2024, employers are required to notify current employees, and former employees hired after January 1, 2022, that any noncompete clause or agreement which they signed is now void. This bill would make a violation of these provisions an act of unfair competition pursuant to the UCL.

Procedural Changes in Favor of Employees

SB 365 – Discretionary Stays Pending Appeals to Compel Arbitration[5]

Under existing law, proceedings in the trial court are generally automatically stayed while a party appeals an order dismissing or denying a petition to compel arbitration. Beginning January 1, 2024, it will be left to the court’s discretion whether proceedings in the trial court should be stayed during the pendency of such an appeal.

Notably, this law is in direct contradiction with a recent U.S. Supreme Court decisions which held that the Federal Arbitration Act (“FAA”) requires “a district court [to] stay its proceedings while the interlocutory appeal on arbitrability is ongoing[.]”[6] Accordingly, we can expect to see this new law challenged in the coming year as preempted by the FAA.

SB 497 – Rebuttable Presumption of Retaliation[7]

This law amends the California Labor Code to create a rebuttable presumption of retaliation if an employer takes adverse action against or disciplines an employee within 90 days of that employee engaging in protected conduct. Protected conduct may include making complaints about and inquiries into unpaid wages or equal pay violations, as well as any other rights pursued under a claim with the Labor Commissioner.

With this law shifting the burden of proof to employers, it is ever more critical for employers to re-examine the internal processes and documents they use when evaluating and/or disciplining employees.

Cannabis Use

AB 2188  and SB 700 – Discrimination in Employment for Cannabis Use

AB 2188[8] was initially signed into law in 2022 but will take effect January 1, 2024. This law will make it unlawful for an employer to discriminate against a person based on their used of cannabis off the job and away from the workplace. SB 700[9] expands these employee protections to also prohibit employers from requesting information about an applicant’s prior cannabis use as a part of the employment process, including inquiring into any criminal history specifically related to cannabis use unless expressly permitted under other state or federal law.  Notably, these laws include exemptions for employers in the building and construction trades.

Notable Employment Bills Vetoed

The legislative session was not all bad news for employers.  Governor Newsom vetoed several employment bills that would have created additional regulatory burdens on employers.   While these bills will not become law in 2024, it is worthwhile to be aware of what the legislature proposed, as we may see reworked versions of these bills in the future.

SB 731 – would require employers provide 30-day written notice before requiring an employee who is working from home to return to in-person work. Governor Newsome explained the inflexible 30-day notice period would provide too great a strain on small businesses.[10]

SB 403 – would have prohibited discrimination based on a person’s “caste” (ancestry). Governor Newsome explained the bill is unnecessary because caste discrimination is already prohibited under the existing categories of the Fair Employment and Housing Act (FEHA).[11]

SB 799 – would have made striking employees eligible for unemployment compensation after a strike has continued beyond two weeks. Governor Newsome cited the immense financial strain on the state should they expand eligibility for Unemployment Insurance benefits.[12]

AB 524 – would add “family caregiver status” as a characteristic protected under FEHA. Governor Newsome cited the ambiguous nature of the language in the bill and the burden it would place on employers, particularly small businesses.[13]

[1] 2023 Cal. S.B. No. 616 (2023-2024 Regular Session).

[2] 2023 Cal. S.B. No. 848 (2023-2024 Regular Session).

[3] 2023 Cal. S.B. No. 699 (2023-2024 Regular Session).

[4] 2023 Cal. A.B. No. 1076 (2023-2024 Regular Session).

[5] 2023 Cal. S.B. No. 365 (2023-2024 Regular Session).

[6] Coinbase, Inc. v. Bielski, 599 U.S. 736, 737 (2023).

[7] 2023 Cal. S.B. No. 497 (2023-2024 Regular Session).

[8] 2022 Cal. A.B. No. 2188 (2022-2023 Regular Session).

[9] 2023 Cal. S.B. No. 700 (2023-2024 Regular Session).

[10] 2023 Cal. S.B. No. 731 (2023-2024 Regular Session).

[11] 2023 Cal. S.B. No. 403 (2023-2024 Regular Session).

[12] 2023 Cal. S.B. No. 799 (2023-2024 Regular Session).

[13] 2023 Cal. A.B. No. 524 (2023-2024 Regular Session).

 

For more information contact:

Matthew Wallin

mwallin@gibbsgiden.com

(424) 317-4423

Matthew Wallin is a partner in the Los Angeles office where he practices labor and employment law.  He has extensive experience defending private business and public entities in litigation and advising clients on labor compliance issues.  

The content contained herein is published online by Gibbs Giden Locher Turner Senet & Wittbrodt LLP (“Gibbs Giden”) for informational purposes only, may not reflect the most current legal developments, verdicts or settlements, and does not constitute legal advice. Do not act on the information contained herein without seeking the advice of licensed counsel. The content contained herein may contain attorney advertising.

For specific questions about any of the content discussed herein or any of the content posted to the Gibbs Giden website please contact the article attorney author or send an email to info@gibbsgiden.com. The transmission of information by email, over the Gibbs Giden website, or any transmission or exchange of information over the Internet, or by any of the included links is not intended to create and does not constitute an attorney-client relationship. For a complete description of the terms of use of this information and the Gibbs Giden website please see the Website Terms section at https://www.gibbsgiden.com/website-terms/. This publication may not be reproduced or used in whole or in part without written consent of the firm. Copyright 2023 Gibbs Giden Locher Turner Senet & Wittbrodt LLP ©

Attorney  Advertisement