Here are five considerations that should be on the top of every employer’s mind in California during the hiring process in 2024:

1. Does the manager posting job ads understand which pay transparency disclosures are required?

Since January 1, 2023, employers with 15 or more employees are required to include the pay scale for the position in any job posting.  SB 1162 amends Labor Code section 432.3 to add this obligation, among other items.  As a reminder, Labor Code section 432.3, effective since January 1, 2018, prohibits California employers from asking applicants about prior salary history.  Section 432.3 already required employers to provide applicants a pay scale “upon reasonable request.”  It defines “pay scale” as “the salary or hourly wage range that the employer reasonably expects to pay for the position.”

2. Will the applicant commit the “unforgivable sin” and how can an employer find this out?

Gary Vaynerchuk explains that being able to put in long hours is not a skill that he looks for in every employee.  The “unforgivable sin” for Vaynerchuk is if employees cannot get along with co-workers, are disrespectful, selfish, or create conflict.  How can an employer find out if an applicant is not a team player?  Seeing how the applicant treats the receptionist upon arriving for the interview and how they treat the waiter at the lunch meeting can be key indicators. Also, asking around with colleagues and your network about people can surprisingly lead to great information about applicants.  For example, it amazes me how many attorneys know of other attorneys in Los Angeles and how important one’s reputation is even in a large legal community like Los Angeles.

3. While legal, I’m not a fan of following up with references provided by applicant.

Is it a good practice to follow-up with the applicant’s references provided? While many employers swear by this practice, I’m not a fan. I just don’t see how an applicant would be so naive to provide a reference that would not be positive for them. Alternatively a Google search of the applicant can provide some great unfiltered information.  I can hear attorneys and HR professionals groaning already about potential legal issues with conducting a basic Internet search of an applicant’s background.  Generally speaking, employers are free to Google an applicant.

4. Does the employer understand obligations when conducting non-criminal background checks?

When conducting a formal background check (i.e., not a Google search, but paying for a background check) on applicants and employees, employers need to take time to review the applicable state and federal laws that apply to background checks.  LinkedIn was sued previously for violation of the federal Fair Credit Reporting Act (FCRA) for certain background reports it generated for users of the site.  In addition, under California law, the Investigative Consumer Reporting Agencies Act and the Consumer Credit Reporting Agencies Act could apply to background checks in the employment context.  These laws are very complex, and employers should enter this area with the knowledge of their obligations before conducting background checks.

5. Does the employer understand state and local criminal history background check prohibitions?

Since January 1, 2018 California employers cannot ask an applicant for employment to disclose information about criminal convictions.  The law (added as Section 12952 to the Government Code) applies to employers with 5 or more employees.  Once an offer of employment has been made, employers can conduct criminal history background checks, but only when the conviction history has a “direct and adverse relationship with the specific duties of the job,” and requires certain disclosures to the applicant if employment is denied based on the background check.  In addition, local governments, such as Los Angeles and San Francisco have implemented their own prohibitions on criminal history checks, and employers must also comply with these local requirements.  Don’t forget about California’s prohibition on inquiring about applicant’s prior salary history and inquires about the applicant’s prior use of marijuana as well.

With new legal requirements facing California employers in 2024, this Friday’s Five article focuses on five initial steps that employers can begin implementing now and other employment law deadlines in 2024:

1. Minimum wage and exempt employees salary threshold: Adjust pay levels for increasing minimum wage and ensure exempt employees are paid minimum threshold salaries to qualify as exempt.

Effective January 1, 2024, the California minimum wage will increase to $16 per hour. Employers should be mindful that higher rates may be in effect in cities (such as San Francisco) or counties (such as Los Angeles) that have enacted their own minimum wage rates, and employers must comply with the highest applicable minimum wage.

To qualify as an exempt employee, the employee must be paid a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. With the state minimum wage increases on January 1, 2024, employers must pay a salary of at least $66,560 per year ($5,546.67 per month).

2. Update reproductive loss leave policy

Employers must update bereavement leave policies to comply with SB 848, which expands employee’s bereavement rights effective January 1, 2024. Employers must provide employees with five days leave for a “reproductive loss event.”  A “reproductive loss event” is defined to include failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction. The law applies to private employers with five or more employees, all public employers, and apply to employees that have worked for the employer for at least 30 days.  As with the bereavement leave requirements, this leave may be unpaid, however, the employee can use other accrued leave. Employees must take the leave within 3 months of the reproductive loss event, and an employer would not be required to provide more than 20 days in a 12-month period.  

3. Review policies to remove noncompetition provisions by January 1, 2024 and provide notices to current and former employees by February 14, 2024.

Effective January 1, 2024, SB 699 voids any contract that restricts an employee from engagement in a lawful profession, trade, or business of any kind, or a noncompetition agreement. This would prohibit an employer from seeking to enforce a noncompetition agreement, regardless of where or when the contract was signed. This restriction applies even if the contract was signed outside of California, or if the employment was maintained outside of California. SB 699 also authorizes an employee, former employee, or prospective employee to bring an action seeking injunctive relief, or for the recovery of actual damages, and allows the prevailing employee, former employee, or prospective employee to recover reasonably attorney’s fees and costs.  

Similarly, AB 1076, which is also effective January 1, 2024, makes it unlawful to impose a noncompete clause on employees, unless a narrow exception applies. Employers should review all offer letters, employment agreements, or other policies distributed to employees to determine if there are any noncompete clauses with employees. If there are such policies, employers are required to notify all current and former employees that were employed after January 1, 2022, that any noncompete agreement or similar clause within their agreement is void, unless it falls within one of the exceptions. This notice must be made by February 14, 2023, and be made in a written, individualized communication delivered to the last known address and email address.  

4. Fast Food Industry Changes

Fast Food Minimum Wage

AB 1228 applies to national fast-food chains, which are defined as: limited-service restaurants consisting of more than 60 establishments nationally that share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products, and services, and “which are primarily engaged in providing food and beverages for immediate consumption on or off premises where patrons generally order or select items and pay before consuming, with limited or no table service.”  Minimum wage for these restaurants will increase to $20 per hour on April 1, 2024.  Fast food employers need to start taking steps to ensure their payroll companies will incorporate this higher minimum wage

Food Handler Card Costs

Existing law requires food handlers to obtain a food handler card within 30 days of their date of hire and to maintain the card throughout employment. Effective January 1, 2024, SB 476 requires employers to pay the $15 cost of training and examination, and to pay the employee for the training time to obtain certification (which is approximately two and one-half hours).  The law also prohibits employers from conditioning employment on having an existing food handler card.

5. Update Paid Sick Leave, Notices to Employees, and Develop Workplace Violence and Prevention Program.

Update paid sick leave policies and ensure proper tracking of paid sick leave amounts by January 1, 2024.

Beginning January 1, 2024, employers will be required to provide five days, or 40 hours. Employers will be able to control the amount used per year at five days or 40 hours per year and cap accrual at 10 days or 80 hours. Many California cities, including West Hollywood, have established local paid sick leave ordinances that provide more leave than required under California law. Employers should be sure to review local ordinances to determine which leave applies.

Update Notice To Employee Under Labor Code section 2810.5 by January 1, 2024.

Labor Code § 2810.5 requires employers to provide a Notice to Employees to all new hires that includes specific information.  Effective January 1, 2024, AB 636 requires employers to include “the existence of a federal or state emergency or disaster declaration applicable to the county or counties where the employee is to be employed, and that was issued within 30 days before the employee’s first day of employment, that may affect their health and safety during their employment.”

Starting on March 15, 2024, employers with employees admitted pursuant to the federal H-2A agricultural visa, employers must include specific information in the 2810.5 notice about their rights as agricultural workers.  The Labor Commissioner is required to publish the updated sample notice by March 1, 2024. 

In addition, employers must also update the 2810.5 notice to include the increased amounts of paid sick leave provided to employees as of January 1, 2024. 

Develop Workplace Violence and Prevention Program by July 1, 2024.

OSHA requires employers to establish and maintain an effective injury prevention program.  SB 553 requires employers to establish and maintain a workplace violence and prevention program. This includes effective training on the workplace violence prevention plan and maintaining records of workplace violence hazard identification, evaluation, and correction, training records, violent incident logs, and workplace incident investigations.  Employers have until July 1, 2024, to establish this program.

As we enter the holiday season, it is a good time to review employer’s obligations to accommodate requests for time off for holidays and best pay practices during the holiday season.  This Friday’s Five covers five reminders for employers about holiday leaves and pay:

1. California employers are not required to provide employees time off for holidays.

There is no requirement that California employers provide time off (except for religious accommodations – see below) for holidays. California’s DLSE’s website states the following:

Hours worked on holidays, Saturdays, and Sundays are treated like hours worked on any other day of the week. California law does not require that an employer provide its employees with paid holidays, that it closes its business on any holiday, or that employees be given the day off for any particular holiday.

2. California employers are not required to pay for time off for holidays, nor are they required to pay additional wages if employees work on holidays.

Likewise, there is no requirement that employers pay employees extra pay or “holiday pay” for work performed on holidays. Employers can voluntarily agree to pay employees extra pay for work that is required during holidays, but these terms would be governed by policy set forth by the employer. Therefore, employers are urged to make sure their holiday pay policies are clearly set forth.

California’s legislature has proposed bills that would require certain employers to pay employees double time for work done on Thanksgiving, but none of these bills have become law.  For example, the “Double Pay on the Holiday Act of 2016” proposed to require an employer to pay at least 2 times the regular rate of pay to employees at retail and grocery store establishments on Thanksgiving. None of these attempts by the legislature have been successful (yet) in requiring California employers to pay any extra “holiday pay.”

3. Employers must provide reasonable accommodations for employees who cannot work on certain holidays due to religious observances.

Employers need to be aware of any religious observances of their employees since employers need to provide reasonable accommodations for employees due to religious reasons. The analysis of reasonable accommodation is on case-by-case basis depending on the company’s type of business and the accommodation requested by the employee. If the employer’s operations require employees to work during normally recognized holidays, such as a restaurant, then this should be communicated to employees in the handbook or other policies and set the expectation that an essential function of the job requires work during normal holidays.

4. If an employer pays for time off during holidays, the employer does not have to allow employees to accrue holiday paid time off.

If an employer pays for time off during certain holidays and an employee leaves employment before the holiday arrives, the employer is not required to pay the employee for the day off.  But the employer’s policy regarding holiday pay must clearly set forth that this benefit does not accrue to employees and that they must be employed during the specific holidays to receive the holiday pay.  Often employers will also require employees to work the days leading up to and following the holiday in order be eligible for the holiday pay.

5. If a pay day falls on certain holidays, and the employer is closed, the employer may process payroll on the next business day.

If an employer is closed on holidays listed in the California Government Code, then the employer may pay wages on the next business day.  The DLSE’s website sets forth this requirement, and other considerations, regarding the timing obligations for payroll.  The holidays listed in the Government Code section 6700 are as follows:

  • Every Sunday
  • January 1 — New Year’s Day
  • Third Monday in January — Martin Luther King Jr. Day
  • February 12 — Lincoln’s Birthday
  • Third Monday in February — Washington’s Birthday
  • March 31 — Cesar Chaves Day
  • Last Monday in May — Memorial Day
  • July 4 — Independence Day
  • First Monday in September — Labor Day
  • September 9 — Admission Day
  • Fourth Friday in September — Native American Day
  • Second Monday in October — Columbus Day
  • November 11 — Veterans Day
  • December 25 — Christmas
  • Good Friday from 12 noon to 3 p.m.
  • Other days appointed by the governor for a public fast, thanksgiving or holiday

Wishing all of our readers a great holiday season!

Nearly every state in the U.S. recognizes the at-will employment doctrine, except for Montana. However, a new law taking effect in California on January 1, 2024, erodes the at-will doctrine even more, and when coupled with the ever increasing list of protected activities that employers may not rely upon for employment decisions (which in 2024 will include the right to smoke marijuana), it raises the question of whether California is still practically an at-will state?

1. The employment “at-will” doctrine

Under California law, it is presumed that all employment is terminable at-will. California Labor Code section 2922 provides: “An employment, having no specified term, may be terminated at the will of either party on notice to the other.” The at-will doctrine means that the employment relationship can be terminated by either party at any time, with or without cause, and with or without advanced notice.
Generally, California law recognizes that employers and employees may, at any time, and for any legal reason, terminate the employment relationship. However, as explained below, the at-will doctrine in California has so many exceptions, and with the passage of SB 497, it is hard to argue that California is an at-will employment state.
California law has gradually added new protected categories and protected activities that prohibit employers from taking any adverse employment actions for those protected reasons. Overtime, California has added to the list of protected categories and protected activities, limiting the at-will doctrine.

2. Protected Categories
California law protects various categories of employees, including:

  • Race (including protective hairstyles, such as braids, locks, and twists)
  • Religion
  • Color
  • Ancestry
  • National origin
  • Physical or mental disability
  • Medical condition
  • Genetic information
  • Marital/domestic partner status
  • Sex (including pregnancy, childbirth, breastfeeding, or related medical conditions)
  • Gender
  • Gender expression
  • Gender identity, including transgender identification
  • Age with respect to persons 40 years of age or older
  • Sexual orientation
  • Military/veteran status

3. Protected Activities

The DLSE defines “protected activity” as engaging in or exercising of a right that is protected by law. It provides some examples as:

  • Filing or threatening to file a claim or complaint with the Labor Commissioner.
  • Taking time off from work to serve on a jury or appear as a witness in court.
  • Disclosing or discussing wages.
  • Using or attempting to use sick leave to attend to the illness of a child, parent, spouse, domestic partner, or child of the domestic partner of the employee.
  • Engaging in political activity of the employee’s choice.
  • For complaining about safety or health conditions or practices.

Protected activities under California law include:

  • Filing a claim with the Labor Commissioner
  • Whistleblowing (Labor Code whistleblowing statute)
  • Seeking information or cooperating with the Employment Development Department (EDD)
  • Being a juror, witness, or election officer
  • Protection for victims of certain felonies, crimes, and abuse
  • Protection for certain healthcare employees who refuse to participate in abortions
  • Labor organization activities
  • Protection for political affiliations
  • Certain school visits for parents
  • Protections for firefighters, reserve peace officers, and emergency rescue personnel to perform emergency duties
  • Disclosing wages or other working conditions
  • Having to make family support payments and wage garnishments
  • Health insurance coverage issues
  • Employees entering rehabilitation programs
  • New for 2024 – AB 2188 protects the employee’s right to use cannabis off duty.

And yes, just to avoid any confusion, the California government protects the right to wear pants. Government Code specifically addresses employees’ right to wear pants to work in California. Section 12947.5 states:

(a) It shall be an unlawful employment practice for an employer to refuse to permit an employee to wear pants on account of the sex of the employee.
(b) Nothing in this section shall prohibit an employer from requiring employees in a particular occupation to wear a uniform.

4. SB 497 – Rebuttable presumption of retaliation starting January 1, 2024

Starting on January 1, 2024, SB 497 creates a rebuttable presumption of retaliation if an employer takes an adverse employment action (such as discharged, threatened with discharge, demoted, suspended, or retaliated against) against an employee within 90 days of that employee engaging in protected conduct. Employers may rebut this presumption, but the burden is on the employer that it had a legitimate reason for terminating the employee. In addition, employers may not retaliate against an employee because the employee’s family member has or is perceived to have engaged in conduct prohibited under this law. Violations of the new law carries a civil penalty up to $10,000 per employee and reasonable attorney’s fees.

5. Steps to preserve the at-will status

Even though the at-will doctrine has been severely limited under California law, employers should still take steps to preserve an employee’s at-will status. Written policies published by the company is the best way to preserve the at-will status. For example, offer letters to employees should clearly set forth that the employee is being hired as an at-will employee, and that employment may be terminated by either party with or without notice at any time. In addition, employers should ensure that the employee handbook has a clear and compliant at-will policy that can only be changed in writing signed by the company owner, CEO, or president.

In the ever-evolving landscape of California’s labor and employment regulations, the upcoming year promises to bring a fresh set of challenges for employers throughout the state. As we begin to close 2023, it’s imperative for businesses to familiarize themselves with the newest legal mandates and adjustments set to shape the way they operate, hire, and manage their workforce in 2024. This article delves into the key employment laws introduced for the forthcoming year, offering insights to ensure compliance and build a collaborative workplace.

AB 1228: Fast Food Franchisor Responsibility Act 

This bill repealed the FAST Act and implemented new regulations of the fast-food industry in California. Notably, this bill increases the minimum wage to $20 per hour as of April 1, 2024, and establishes the Fast Food Council. For details on how this Act will affect you, take a look at our detailed post here.  

Assembly Bill 594: Public prosecution for wage theft/labor code violations  

Public prosecutors (meaning, the Attorney General, a district attorney, a city attorney, a county counsel, or any other city or county prosecutor) can enforce labor code violations by pursuing civil or criminal actions for certain labor code violations. These labor code violations include unpaid minimum wage, unpaid overtime, failure to provide meal breaks, and failure to provide rest breaks. Public prosecutors may also enforce these labor code sections independently. Any money recovered until this code will go to the affected workers, and all civil penalties recovered under this section will be paid to the General Fund of California. The Plaintiff may also be entitled to reasonable attorney fees. It is important for employers to note that this is in addition and separate from the Labor Commissioners right to investigate and hear employee complaints, and the Labor Workforce and Development Agency’s rights under PAGA.  

Assembly Bill 1076 and Senate Bill 699: Noncompete Agreements and Clauses 

AB 1076 and SB 699 codifies existing law. SB 699 voids any contract that restricts an employee from engagement in a lawful profession, trade, or business of any kind, or a noncompete agreement. This would prohibit an employer from seeking to enforce a noncompete agreement, regardless of where or when the contract was signed. This restriction applies even if the contract was signed outside of California, or if the employment was maintained outside of California. SB 699 also authorizes an employee, former employee, or prospective employee to bring an action seeking injunctive relief, or for the recovery of actual damages, and allows the prevailing employee, former employee, or prospective employee to recover reasonably attorney’s fees and costs.  

Similarly, AB 1076, makes it unlawful to impose a noncompete clause on employees, unless a narrow exception applies. Employers should review all of their offer letter, employment agreements, or other policies distributed to employees to determine if there are any noncompete clauses with employees. If there are such policies, employers are required to notify all current and former employees that were employed after January 1, 2022, that any noncompete agreement or similar clause within their agreement is void, unless it falls within one of the exceptions. This notice must be made by February 14, 2023, and be made in a written, individualized communication delivered to the last known address and email address.  

Senate Bill 616: Paid Sick Leave Expansion 

Currently, employers are required to provide employees with three days, or 24 hours, of paid sick leave. Beginning January 1, 2024, employers will be required to provide five days, or 40 hours. Employers will be able to control the amount used per year at five days or 40 hours per year and cap accrual at 10 days or 80 hours. Many California cities, including West Hollywood, have established local paid sick leave ordinances that provide more leave than required under California law. Employers should be sure to review local ordinances to determine which leave applies.  

Senate Bill 723: Re-Hiring Rights for Laid-Off Employees  

Currently, employers in the hospitality and business service provider industries are required to offer reemployment to qualified former employees as long as the former employees were (1) employed for at least 6 months in the year before January 1, 2020, and (2) laid off for a reason related to the pandemic. This is now expanded to apply to former employees who were employed for at least 6 months and laid off on or after March 4, 2020. Additionally, any separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is presumably a reason related to COVID-19. This law sunsets on December 31, 2025.  

Senate Bill 497: Presumption of Retaliation 

Employers are prohibited from discriminating, retaliating, or taking any adverse employment action against an employee or applicant because they engaged in protected conduct. Now, there is a rebuttable presumption of retaliation if the employer disciplines or takes adverse action against an employee within 90 days of that employee engaging in protected conduct. This means that simply by taking that action, the Plaintiff will be able to establish its prima facie case. It will be up to the employer to dispute this and establish that it did not discriminate, retaliate, or take an adverse employment action because the employee or applicant engaged in protected conduct.  

Senate Bill 848: Reproductive Loss Leave 

This bill expands employee’s bereavement rights. Employers must provide employees with five days leave for a “reproductive loss event.” A “reproductive loss event” is defined to include failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction. This bill applies to private employers with five or more employees, all public employers, and apply to employees that have worked for the employer for at least 30 days. As with the bereavement leave requirements, this leave may be unpaid; however, the employee can use other accrued leave. Employees must take the leave within 3 months of the reproductive loss event, and an employer would not be required to provide more than 20 days in a 12-month period.  

Senate Bill 428: Workplace Restraining Orders 

Employers are already authorized to seek a temporary restraining order on behalf of an employee who has suffered an unlawful violence or a credible threat of violence if it can reasonably be carried out in the workplace. Now, employers may also seek a temporary restraining order on behalf of employees who have suffered harassment. The employer must allow the employee the opportunity to decline being named in the order before filing the petition. The bill includes a carve out to prevent a temporary restraining order against speech or activities that are protected by the NLRB.   This bill goes into effect on January 1, 2025.  

Senate Bill 553: Workplace Violence Prevention 

The California Occupational Safety and Health Act of 1973 already requires employers to establish and maintain an effective injury prevention program. Now, employers will be required to establish and maintain a workplace violation prevention program. Employers must provide effective training to employees on the workplace violence prevention plan. In addition to the prevention program, employers must maintain records of workplace violence hazard identification, evaluation, and correction, training records, violent incident logs, and workplace incident investigation records. Employers have until July 1, 2024, to establish this program.  

Senate Bill 700: Marijuana Protections 

Employers may no longer ask an applicant about their prior marijuana use. This bill clarifies that the law against discrimination on the basis of marijuana includes information the employer obtained about prior marijuana use from the applicant’s or employee’s criminal history.  Our detailed article about SB 700 can be found here.

Senate Bill 525: Healthcare Workers Minimum Wage 

This bill creates a series of minimum wage requirements varying by type of healthcare employer with yearly increases. Additionally, covered health care employees that are paid on a salary basis must earn a monthly salary equal to no less than 150% of the health care minimum wage or 200% of the applicable minimum wage, whichever is greater, for full-time employment, to qualify as exempt from payment of minimum wage and overtime.  

Learn more during our webinar

Join our experts on Thursday, October 26, 2023, as we dig deeper into these new laws and how they may affect you. Register for our free webinar here: https://us06web.zoom.us/webinar/register/6316951613202/WN_RDLUQU6mSvKBzkCfB9eU-A.  

Governor Newsom signed a new law this week restricting employers from asking about marijuana use and conducting certain drug tests for applicants and employees.  This Friday’s Five covers what the new law means for employers in the context of existing law governing employer’s ability to ask, test, and regulate employee’s use of marijuana in the workplace:

1. SB 700 – Prohibition on discrimination based on cannabis use

SB 700, signed by Governor Newsom on October 7, 2023, prohibits employers from asking applicants and employees about prior use of marijuana. Employers are also prohibited from using information regarding an applicant’s or employee’s prior cannabis use derived from a criminal background check, unless this is otherwise permitted under the State’s Fair Chance Law, other state laws, or other federal laws. 

SB 700 excludes certain employers from these requirements, including employees in the building and construction trades and employers who are required to conduct federal background investigation or clearances. 

The law is also clear that it does not prohibit employers from disciplining employees for being under the influence of cannabis or possessing cannabis while at the workplace. 

2. AB 2188: Discrimination in employment: use of cannabis

As a reminder, AB 2188, which was passed in 2022, amends Government Code section 12945 to make it illegal for employers to discriminate against employees who use cannabis off the job and away from the workplace. The law specifies that an employer is prohibited from discriminating against any person for hiring, termination, or any term or condition of employment based on the person’s use of cannabis off the job and away from the workplace. The law prohibits use of drug tests that test for “nonpsychoactive cannabis metabolites.” However, the law provides that there are alternative tests that are permissible, such as “impairment tests, which measure an individual employee against their own baseline performance and tests that identify the presence of THC in an individual’s bodily fluids.” The bill does not create the right for the employee to be impaired while at work, does not apply to the building and construction trades, and does not preempt state or federal laws requiring employees to be tested.  AB 2188 law becomes effective on January 1, 2024.

3. Proposition 64

In 2016, California passed Proposition 64 legalizing marijuana. Proposition 64 expressly provides that employers may prohibit marijuana in the workplace, and will not be required to accommodate an employee’s use of marijuana. 

4. California’s Supreme Court ruling in Ross v. Ragingwire

In Ross v. Ragingwire Telecommunications, Inc., the California Supreme Court examined the conflict between California’s Compassionate Use Act, (which gives a person who uses marijuana for medical purposes on a physician’s recommendation a defense to certain state criminal charges and permission to possess the drug) and Federal law (which prohibits the drug’s possession, even by medical users).  The court held that the Compassionate Use Act did not intend to address the rights and obligation of employers and employees, and further noted that the possession and use of marijuana could not be a protected activity because it is still illegal under federal law.

5. Learn more about this and other new laws facing California employers in our October 26, 2023 webinar

My firm is hosting a webinar that will cover the new laws facing California employers in 2024 and what steps employers need to take to prepare for these new laws.  Registration for the webinar is here.

On October 4, 2023, Governor Newsom approved a new law, SB 616, that increases the amount of paid sick leave that nearly every employer in California must offer to employees.  Here are five key issues California employers need to understand about the new law and to comply with its requirements:

1. New requirements under SB 616:

As background, California’s existing paid sick leave law, the Healthy Workplaces, Healthy Families Act of 2014, became effective on January 1, 2015.  The law requires employers of all sizes to provide 1 hour of paid sick leave for every 30 hours worked to employees who worked for the employer for 30 or more days.  Employers may cap the accrual of paid sick leave at 48 hours and cap the use of paid sick leave at 3 days or 24 hours, whichever is greater, within a 12-month period.  SB 616 increases the amount of paid sick leave employers must provide starting on January 1, 2024. 

SB 616 will require employers to provide the following as of January 1, 2024:

  • Requires employers to provide paid sick leave of 5 days or 40 hours.
  • Employers may still offer an accrual rate of one hour of PSL for every 30 hours worked. For employers that use a difference accrual method other than 1 hour of PSL for every 30 hours worked, the employer must offer on an accrual on a regular basis of no less than 24 hours of accrued sick leave or paid time off by the 120th calendar day of employment or each calendar year, or in each 12-month period, and no less than 40 hours of accrued sick leave or paid time off by the 200th calendar day of employment or each calendar year, or in each 12-month period. Employers may satisfy the accrual requirements by providing not less than 24 hours or 3 days of PSL by the employee’s 120th calendar day of employment, and no less than 40 hours or 5 days of PSL by the employee’s 200th calendar day of employment.
  • Employers may limit the use of PSL to 40 hours or five days in each year of employment, calendar year, or 12-month period.
  • Employers may cap the accrual of paid sick leave to 10 days or 80 hours.  A total of 10 day or 80 hours is also the cap that employers can place on the amount of paid sick leave an employee can carryover from year to year.  However, employers who provide an upfront grant of 5 days or 40 hours at the beginning of each year do not need to provide any accrual, nor do they need to allow any carryover. 

2. Update new hire packets and Notice to Employee:

Employers must update their new hire packages to include an updated Notice to Employee required by Labor Code section 2810.5.  The current version (which does not reflect the new requirements going into effect on January 1, 2024) is available here: https://www.dir.ca.gov/dlse/lc_2810.5_notice.pdf 

Stay tuned for updates regarding when this form is updated to comply with SB 616. 

3. Update employee handbooks and workplace posters:

Employer’s paid sick leave policies in their handbooks will need to be updated to conform to the new requirements under SB 616.

4. Update pay stub information:

Also, just as required under existing law, the new law requires that employers provide notice to the employee of the amount of PSL that is available to the employee by employee’s pay date with the employee’s payment of wages.  This notice can be made on the employee’s pay stub or some other writing at the time the employee is paid.  Employers should start working with their payroll companies to ensure the updated amounts are reflected on pay stubs issued after January 1, 2024.  It is recommended that a sample from the payroll processing company should be reviewed prior to January 1, 2024 to ensure it meets the legal requirements.

5. Do not rely on payroll company to implement these changes:

Employers must proactively contact their payroll companies to ensure that the new upfront grants or accrual rates are reflected on the employee pay stubs and that the paid sick leave is being tracked according to the new upfront grants or accrual rates after January 1, 2024.  Do not rely on your payroll company to automatically update the pay stubs and tracking of paid sick leave – make sure your payroll company starts working on this sooner than later.  

On September 28, 2023, Governor Newsom signed AB 1228 into law, which repealed the FAST Act and implemented new regulations of the fast food industry in California.  AB 1228 was amended to reflect the terms of an agreement reached between labor representatives and fast-food companies that was announced on September 10, 2023.  We have reported on the terms of the agreement before here, but given the importance of the new law, this Friday’s Five delves into the details of AB 1228 and highlights five key issues of the new law signed by Governor Newsom:

1. Covered employers:  AB 1228 applies to national fast food chains, which are defined as “limited-service restaurants consisting of more than 60 establishments nationally that share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products, and services, and which are primarily engaged in providing food and beverages for immediate consumption on or off premises where patrons generally order or select items and pay before consuming, with limited or no table service. For purposes of the definitions in this part, “limited-service restaurant” includes, but is not limited to, an establishment with the North American Industry Classification System Code 722513. Bakeries and grocery stores are exempt from this definition and are not included as fast food restaurants. 

2. Minimum wage for fast food restaurant employees: $20 per hour on April 1, 2024.  Each year thereafter on January 1, the fast food council may increase the minimum wage by the lesser or 3.5% or the average change in the U.S. Consumer Price Index.  The council has the ability to set a different minimum wage based on the region of the state or to set a statewide minimum wage increase.  The fast food council’s minimum wage preempts any other local city or county minimum wage requirements. 

3. Establishment of the Fast Food Council: This council, set up within the Department of Industrial Relations, will have representatives for all interests – employers, employees, and advocates alike. The council would be made of 9 voting members, including representatives from various sectors of the fast food industry, fast food restaurant franchisees or restaurant owners, fast food restaurant employees, advocates for fast food restaurant employees, and a neutral chairperson.  However, the Governor still maintains the power to appoint all but 2 of the 9 positions on the council. The council’s responsibilities are significant.  From 2025 to 2029, they can adjust the hourly minimum wage each year (subject to the caps discussed above). The council can also recommend other workplace standards to state agencies. But, these recommendations will undergo rigorous review under the California Administrative Procedure Act and the council does not have authority to implement any other workplace standards by itself. 

4. The FAST Act (AB 257) will be repealed and the referendum that was set to go to California votes in November of 2024 will be withdrawn

5. Key issues eliminated from the law:

  • The Industrial Welfare Commission will not be revived.   Governor Newsom signed AB 102 on July 10, 2023, and a part of that bill funded the IWC to reconvene to issue wage orders regulating the “wages, hours, and working conditions” for various industries.  Employers could have expected regulations from the IWC covering nearly every industry in California (as the current wage orders cover most industries) by October 2023. By funding the IWC, labor representatives had a backup plan to continue to regulate the quick-service industry (among other industries across California) in case the FAST Act was repealed by the voters in 2024.  The agreement reached now eliminates the funding for the IWC and it will not reconvene. 

The implications of AB 1228 are significant for the fast food industry in 2024. It is imperative for employers to be prepared. As the Governor’s deadline for signing other bills looms in mid-October, our firm remains diligent in reviewing any key legislative updates. We invite business owners, human resource professionals, and in-house counsel to join our webinar on October 26, 2023, where we will review the newly enacted employment laws for California. Registration for this informative session can be accessed here.

The legislative session has drawn to a close, and a slew of bills now await Governor Newsom’s decision. He has until October 14, 2023, to either sign them into law or veto them. In this week’s Friday Five, we spotlight the five bills, in the author’s view, that could profoundly affect California employers:

1. SB 731 – Work From Home Rights (text of bill)

SB 731 would require an employer to provide employees with at least 30 days’ written notice by mail or email prior to requiring an employee to return to work. The bill includes specific language that must be contained, including language about requesting a reasonable accommodation if they have a disability. 

2. SB 699 – Noncompete Agreements – Already Signed Into Law (text of bill)

Already signed by the Governor, SB 699 will go into effect on January 1, 2024, and prohibits employers from entering into or enforcing noncompete agreements, regardless of the employee’s work location, or when and where the agreement was entered into.

3. AB 1076 – Noncompete Clauses (text of bill)

AB 1076 would void noncompete agreements in an employment contract, regardless of how narrowly tailored they are. This bill would also require employers to give employees who have previously signed a noncompete agreement notice that it is now void.

4. SB 616 – Paid Sick Leave Expansion (test of bill)

Currently, employers are required to provide employees with three days, or 24 hours, of paid sick leave. SB 616 would increase the amount of sick paid leave to five days, or 40 hours. Employers would be able to control the amount used per year at five days or 40 hours per year and cap accrual at 10 days or 80 hours.

5. SB 497 – Presumption of Retaliation (text of bill)

SB 497 creates a rebuttable presumption of retaliation if an employer disciplines or takes adverse action against an employee within 90 days of that employee engaging in protected conduct.

Indeed, if you’re keen to discover more about pending employment law bills that the Governor has yet to decide on, join us in our 2nd annual “Sign or Veto” Challenge. Showcase your knowledge in employment law and make your predictions on which bills the Governor will approve or decline. Plus, stand a chance to grab some exclusive Zaller law swag!

We recommend employers develop a separation checklist to ensure the company’s policies are followed as well as all applicable laws that pertain to the employer.  This article provides five issues employers should consider in developing a separation checklist for their company:

1. Documenting reason for termination

Employers should establish a protocol for documenting the reason for termination.  Some considerations for documenting could include the following:

  • Is there a company policy that was violated? Is this policy in writing?  Has it been distributed to the employee, and has the employee signed an acknowledgment of the policy?
  • Who was involved in the termination decision?
  • Review reasons for termination, and have clear guidelines for seeking legal counsel to avoid any potential wrongful termination or discrimination claims.

2. Final paycheck amounts and timing requirements

An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination.  Ensure that the final paycheck will be available to the employee on a timely basis (see below for timing requirements).  If an employee had direct deposit, an employee must re-authorize direct deposit for a final paycheck, and this should be documented.  In Canales v. Wells Fargo, N.A., (2018) the court held that employers are not required to provide final wage statements (pay stubs) at the same time as the final check, but instead have until the semimonthly deadline set forth in Labor Code section 226(a).

California law requires the employer comply with the following deadlines for providing final paychecks:

  • An employee who is discharged must be paid all of his or her wages, including accrued vacation, immediately at the time of termination. This does not mean that the company cuts the check and mails it to the employee, the check must be provided to the employee at the time of termination.
  • An employee who gives at least 72 hours prior notice of quitting, and quits on the day given in the notice, must be paid all earned wages, including accrued vacation, at the time of quitting.
  • An employee who quits without giving 72 hours prior notice must be paid all wages, including accrued vacation, within 72 hours of quitting.
  • An employee who quits without giving 72-hours notice can request their final wage payment be mailed to them. The date of mailing is considered the date of payment for purposes of the requirement to provide payment within 72 hours of the notice of quitting.

Final wage payments for employees who are terminated (or laid off) must be made at the place of termination. For employees who quit without giving 72 hours notice and do not request their final wages be mailed to them, the location is at the office of the employer within the county in which the work was performed.

3. Compile list of documents to provide to separating employees

California law requires employers to provide certain documents to employees upon their separation from employment.  Here is a list of some of the common forms often required to be provided to employees:

Employers should take time to review their obligations and forms that are required for their particular industry or situation.

4. Establishing protocol for references and disclosing why the employee left the company within the company

Employers often establish that it will only confirm the title and dates of employment for former employees, and, if authorized by the former employee, the former employee’s final pay rate. Employers do this to avoid potential claims for misrepresentation, violation of privacy, and defamation. Also, employers need to be careful about disclosing the reason for an employee departure within the company, as that may violate the former employee’s privacy rights. Employers should remind employees and management not to disclose this information to people in the company that do not have a reason to know, and remind employees about who any requests for references should be directed to within the company.

5. Evaluate whether a severance agreement would be appropriate

Under California law, the obligation to provide severance to a departing employee is not required. However, employers can offer severance to employees for numerous reasons:

  • during a layoff the employer wants to provide something to the employees for their recognized service,
  • the company entered into a contract with an executive to provide severance if certain conditions were met, or
  • the separation is high risk and there is potential litigation between the parties and the employer wishes to obtain a release of claims to prevent future litigation.

If an employer offers severance payment to a departing employee, they should always have the severance agreement reviewed by an employment attorney to ensure that it contains a broad release of claims so that the employee cannot initiate litigation against the company for claims that arose during their employment. My previous article discussed in more detail issues about severance and severance agreements.