Happy New Year!  2023 has been another challenging year for California employers.  Some of the critical issues for employers included returning employees to the office after COVID-19, the California Supreme Court’s ruling that employers could not enforce PAGA waivers in arbitration agreements, the continuing onslaught of PAGA litigation, and the new employment laws passed for 2024.

This Friday’s Five focuses on the enormous amount of work put forth by our team at Zaller Law Group (ZLG) during 2023 in helping California employers deal with and stay informed with California legal developments:

1. 54 Blog Posts

The California Employment Law Report was a primary resource ZLG uses to provide updates about California employment law during the year.  Our blog will continue to be one of the first places new legal issues that employers need to know about are posted.  If you are not already a subscriber, you can subscribe to the blog here:  https://www.californiaemploymentlawreport.com/subscribe/

2. Over 20 webinars conducted

We hosted a number of webinars through our Firm, as well as in partnership with various organizations.  These webinars were a great source of information for California employers to stay informed about California’s quickly developing issues.

3. 71 YouTube Videos

There were over 68,000 views of the Firm’s video content on our YouTube channel.  Our number of subscribers to the channel continues to rise each year.  Currently there are over 2,300 subscribers. Feel free to check out our channel here: Employment Law Report – YouTube.

4. Most viewed LinkedIn Post: Discussion of Los Angeles Times article I was quoted in regarding litigation facing restaurants over service charges and tips.

The Los Angeles Times article discussed the ins and outs of tips and service fees under California law. If you’ve ever been puzzled by these rules as a consumer or a business, the article is a great read.  My LinkedIn post discussing the article was the most viewed post during 2023 – understandably as it is a critical issue facing California’s hospitality industry. 

5. 10 employees of Zaller Law Group.

The work described above is a testament to the dedication of the attorneys and staff at Zaller Law Group on how hard the team works to reach these accomplishments in 2023 – especially considering that this work is in addition to the normal litigation obligations the team provides in defending employers in court.

Wishing everyone the best for 2024, and we look forward to assisting California employers in successfully navigating California employment laws in the New Year!

This Friday’s Five is a break from the normal legal update – I’m asking you a few questions.  I started this post last year, and wanted to continue with the questions. Hopefully the questions will help you reflect on 2023, what you are most grateful for, and what you are looking forward to in 2024.  I cannot claim credit for many of these questions, as many of them have been asked during various meetings I attended leading up to the holidays.

What is the thing you are most grateful for in 2023?

I’m grateful to work with clients who inspire me with the products and services they sell. I am amazed with the variety of products my clients invent, and how innovative these businesses are.

What is your favorite thing to do over the holidays? 

I enjoy going somewhere with snow with my family.  We spend some time skiing and have a lot of down time to hang out.  Usually we get snowed in, and it is nice to spend the time with family with no outside obligations.  However, this year there is not much snow, but it is nice being in an area without distractions so that I can spend time with my family without having everyone preoccupied with gifts and other obligations.

If you were to have a famous singer visit your house for a concert during the holidays, who would you like? 

This was a question asked during a board meeting – the responses were awesome.  For me, my favorite singer is still Walker Hayes.  I really enjoyed seeing him in concert, and think Walker would be a great musician to have over for a holiday party.  My favorite song of his?  Probably “Country Stuff.”

What is your favorite food during the holidays?

I’ve had some great tamales given to me from a restaurant client, and I look forward to them every year.  However, my best friend/roommate from college and his mom make a cookie plate with a variety of cookies, and these are by far my favorite (if I can fend off my family members from eating them before I can have a couple).

What is the coldest place you’ve ever traveled to during the holidays?

Last year while I was in Montana for the holidays, it reached -22 degrees Fahrenheit. This was the coldest weather I’ve ever been in.

I hope these questions help you review what is important to you and reflect, even if it is only for a minute.  I hope you are staying warm and wishing you the best over the holidays and have a Merry Christmas.

Labor Commissioner hearings can be a stressful ordeal. However, with some planning and understanding about the process, employers can set themselves up for the best possible outcome. Here are a few pointers about the strategy during Labor Commissioner hearings, and items to remember while completing the process.

1. Be courteous to everyone during the process.
Be nice to the clerk checking people in at the Labor Commissioner’s office. Be nice to the Deputy Labor Commissioner hearing the claim. And yes, be nice to the claimant. You can be nice while still aggressively defending your position, just don’t be an a$$ about it. I can hear other lawyers criticizing this advice already with the idea that you do not want to make the process pleasant for the other side in order to deter this type of behavior. I disagree with this approach. First, once the claim is resolved, it is generally binding on the parties, so by making the process unpleasant on the claimant, it will not be deterring any other actions. Second, the hearing officers are human beings, if they get the sense that you (or your opponent) are the unreasonable party creating the conflict, they are probably going to find against you.

2. Do not take it personally.
Because Labor Commissioner claims can be relatively small, and parties do not need to be represented by a lawyer, many parties represent themselves during the process. However, just like negotiating someone’s salary, employers need to view the process as a business transaction, not a personal attack. If it is too hard to separate the personal issues from the process, it is best to hire a lawyer to help make the arguments for the company and to help take the personal aspect of the process out of the equation.

3. Read the DLSE’s website for the Labor Commissioner’s view of the law.
The DLSE has a great website explaining its position on some aspects of California labor law. While the DLSE’s view expressed on its website is not necessarily binding on the parties, it is a good starting point regarding what issues the company will likely be challenged on during the proceeding.

4. Make the record.
The actual Labor Commissioner hearing is tape recorded, and the parties and any potential witnesses give testimony under oath during the proceeding. Therefore, because there is a record of testimony provided under oath, if the case is appealed to superior court by either party after the hearing, this testimony will be very important in subsequent proceedings.

5. Don’t make the wrong record.
This goes back to being prepared. All parties have to be truthful as they are sworn in, but be careful in your testimony. Think through all of the facts before the hearing. If you wrongly recall facts or begin to guess at answers during the Labor Commissioner hearing, and then try to correct those facts at a subsequent proceeding, it will adversely affect your credibility. Think through your testimony before the hearing in order to be as accurate as possible.

The recent surge in Private Attorneys General Act (PAGA) lawsuits and the amounts of damages sought in these cases in California has become a significant cause for concern among the business community. This legislation, initially designed to empower employees to file lawsuits for labor code violations on behalf of themselves and other workers, has seen a dramatic increase in its application. This uptick has not only heightened the legal and financial pressures on companies across various industries but also raised questions about the broader implications for the state’s business environment. The California Supreme Court recently heard oral arguments in Estrada v. Royalty Carpet Mills, Inc., regarding whether a trial court has discretion to limit PAGA cases that are unmanageable.  This article reviews the split in California Appellate courts on this issue, and how the case could impact the potential future of PAGA litigation in California.

1. Background of PAGA

PAGA was enacted in 2004 to authorize aggrieved employees to file lawsuits against employers on behalf of themselves, other employees, and on behalf of the State of California for Labor Code violations.  PAGA allows aggrieved employees to act as a “Private Attorneys General” to seek remedies against their employer not only for the violations committed against them, but also to recover any violations committed by their employer against other employees.  The statute was intended “to punish and deter employer practices that violate the rights of numerous employees under the Labor Code.” Iskanian v. CLS Transportation Los Angeles, LLC (2014).   The plaintiff’s ability to bring claims on behalf of other employees is referred to as “non-individual claims.” PAGA is “simply a procedural statute allowing an aggrieved employee to recover civil penalties … that otherwise would be sought by state labor law enforcement agencies.” Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009).

2. Supreme Court issue being reviewed in Estrada v. Royalty Carpet Mills, Inc.

Do trial courts have inherent authority to ensure that claims under the Private Attorneys General Act (Lab. Code, § 2698 et seq.) will be manageable at trial, and to strike or narrow such claims if they cannot be managed?

The parties had oral argument before the California Supreme Court on November 8, 2023.  Therefore, a decision should be expected at any time.  This decision will resolve a split in authority between two cases: Wesson v. Staples of the Offices Superstore, LLC and Estrada v. Royalty Carpet Mills, Inc.

3. Wesson v. Staples of the Offices Superstore, LLC – Holding that trial courts have authority to deem PAGA cases are unmanageable.

In Wesson v. Staples of the Offices Superstore, LLC (September 2021) the Second Appellate District, Division Four, of the Court of Appeal of California held, “We conclude that courts have inherent authority to ensure that a PAGA claim will be manageable at trial—including the power to strike the claim, if necessary—and that this authority is not inconsistent with PAGA’s procedures and objectives, or with applicable precedent.”  In so holding, the Wesson court found  that the trial court did not abuse its discretion in striking Wesson’s PAGA claim as unmanageable.

The Wesson court explained that, “California courts have exercised their inherent powers to preclude representative claims where a trial of those claims would be unmanageable. In the class action context, the courts have required class action proponents to demonstrate that ‘litigation of individual issues, including those arising from affirmative defenses, can be managed fairly and efficiently.’”

In Wesson, the plaintiff brought a PAGA claim for over 346 Staples General Managers for over $36 million in civil penalties.  Wesson’s claims were based on the theory that the GMs were misclassified as exempt employees, and should have been paid overtime, and provided meal and rest breaks.  The Appellate court noted that the record “raised significant manageability concerns.”  Staples presented evidence that the GM position was not standardized, and there were critical variations on how GMs performed their jobs and the extent to which they performed nonexempt tasks.  Staples produced evidence that showed the duties for each of the GMs varied based on each store’s “size, sales volume, staffing levels, labor budgets, and other variables.” Staples also presented evidence that showed GMs’ management duties varied based on each of their “experience, aptitude, and managerial approaches, among other factors.”  Based on this, Staples argued that Wesson’s PAGA allegations “would require individualized assessments of each GM’s classification and would lead to ‘an unmanageable mess’ that ‘would waste the time and resources of the Court and the parties … .’”

Therefore, the Wesson court held, “We do not believe a court is powerless to address the challenges presented by large and complex PAGA actions and is bound to hold dozens, hundreds, or thousands of minitrials involving diverse questions, depending on the breadth of the plaintiff’s claims.” 

4. Estrada v. Royalty Carpet Mills, Inc. – Holding that trial courts do not have authority to deem PAGA cases unmanageable. 

In March 2022, the Fourth Appellate District, Division Three of the California Court of Appeal issued a decision in Estrada v. Royalty Capet Mills, Inc. disagreeing with the holding in Wesson.  The court in Estrada stated, “After reviewing both perspectives, we respectfully disagree with Wesson and agree with the reasoning of the district courts that have refused to dismiss PAGA claims based on manageability.” The court in Estrada held that manageability is a requirement that plaintiffs must prove in a class action, but that “‘a representative action under PAGA is not a class action.’” The court explained that a class action is “a procedural device for aggregating claims ‘when the parties are numerous, and it is impracticable to bring them all before the court.’” However, PAGA claims “are administrative law enforcement actions that ‘are different from conventional civil suits. The Legislature’s sole purpose in enacting PAGA was ‘to augment the limited enforcement capability of the [Labor Workforce Development Agency (LWDA)] by empowering employees to enforce the Labor Code as representatives of the Agency.’” 

Due to the differences between class actions and PAGA representative actions, the California Supreme Court has held that PAGA plaintiffs need not meet class action certification requirements when pursuing PAGA penalties in Arias v. Superior Court, and Kim v. Reins International California, Inc. 

The court in Estrada held, “Accordingly, requiring that PAGA claims be manageable would graft a crucial element of class certification onto PAGA claims, undercutting our Supreme Court’s prior holdings.”

However, the Estrada court conceded that there are issues that trial courts must manage in PAGA cases, as “[s]ome PAGA claims involve hundreds or thousands of alleged aggrieved employees, each with unique factual circumstances. We do not intend our ruling to mean that in such scenarios, a court must allow for each of these alleged aggrieved employees to be examined at trial. Such a scenario would be unduly expensive, impractical, and place far too great a burden on our already busy trial courts. Rather, courts may, where appropriate and within reason, limit witness testimony and other forms of evidence when determining the number of violations that occurred and the amount of penalties to assess.”  Ultimately the Estrada court did not set forth a standard for trial courts to manage PAGA claims, just that, “[w]e encourage counsel to work with the trial courts during trial planning to define a workable group or groups of aggrieved employees for which violations can more easily be shown….If a plaintiff alleges widespread violations of the Labor Code by an employer in a PAGA action but cannot prove them in an efficient manner, it does not seem unreasonable for the punishment assessed to be minimal.”

5. 2024 Balot Initiative to reform PAGA

Anytime now, the California Supreme Court will issue a decision in the Estrada case, which may empower trial courts to more effectively manage Private Attorneys General Act (PAGA) claims. This could include the authority to restrict the use of this procedural device in cases where it is deemed inappropriate. On another front, PAGA faces a challenge directly from the voters of California. The California Fair Pay and Employer Accountability Act aims to replace PAGA. This initiative has garnered enough signatures to secure a spot on the November 2024 ballot. If approved, it would allow employees to receive 100% of the penalties collected, a significant increase from the current 25% allocation. Additionally, it proposes to prohibit the awarding of attorneys’ fees in such cases and to double the penalties for employers who knowingly violate the law. More details about the initiative are available on the Californians for Fair Pay and Accountability website.

California employers often ask me the question of what steps can they take to stop employment litigation. My response usually begins with a warning that there is nothing an employer can do that will prevent a frivolous lawsuit, but the employer should focus on what they can control.  Employers can only control their actions and decisions, and by thinking about and reviewing a few simple items at least once a quarter, it can greatly reduce a company’s liability. Here are five steps employer can start with (hint – the most important step in my opinion is listed last):

1. Implement accurate and easy to use timekeeping system.

California law requires employers to track start and stop times for hourly, non-exempt employees. The law also requires employer to track the start and stop times for the employee’s thirty minute meal periods. The time system needs to be accurate, and the employer needs to be involved in the installation and setup of the system. Do not simply use the default settings for the hardware and software. Understand what the system is tracking and how it is recording the data. Since the statute of limitations for California wage and hour violations can extent back four years, it is recommended that employers take steps to keep these records at least four years.

2. Have compliant policies and document everything.

I cannot overemphasis the need to document what occurs in the workplace. Most importantly, employers need to document employee performance. It is all too often that a problem employee’s personnel file does not contain any type of documentation about his poor performance. Then, when the employee challenges the employer’s termination decision, it is much harder to prove the business reason behind the decision.

Employers should periodically have their handbooks, operating policies and new hire packets reviewed to ensure they are current. Employers need to remember that a review of policies should extend beyond the handbook, but should also incorporate a review of all other policies, pay practices, and documents that are given to employees when they are hired, during employment, and at termination.

3. Get to know an employment attorney you can run issues by on a day-to-day basis.

You knew this was coming, but regardless of the unashamed self-promotion, employers should have counsel that is well versed in California employment law. California’s employment laws are very nuanced, and an attorney that has experience in this area will save the company not only in legal fees, but also in potential exposure. I have a client that says that when you have a problem with your eyes, you don’t go to you general practitioner. The same applies for advice on California employment issues. It is very unique. In addition, working with an employment lawyer on a routine basis is also a great way to see how he or she works and if the lawyer is compatible with your operations. This is much better to find out early on, instead of discovering that you don’t get along with your counsel in the middle of defending a class action lawsuit.

4. Consider hiring a knowledgeable HR professional.

An experienced HR professional will allow the president or other executives in the company to focus their time and energy in their core roles. In addition, it is helpful from a structural and managerial perspective for the employees in an organization to know exactly who to go to for HR information or complaints. A human resources professional with experience in handling workplace investigations and dealing with employee complaints is very valuable to a company – let’s face it, no matter how well you run your company, there will be complaints. Having a proactive, knowledgeable professional assisting in the process of investigating and resolving the issues is instrumental to a successful company.

5. The owner/CEO needs to be present, involved, and open to hearing out employees’ complaints.

In my opinion, I think the most important step towards reducing employment litigation comes from the top.  And the amount of litigation is inversely proportional to how involved the owner or the CEO of the company is with the employees.  I’ve seen very large employers in California have a very clean litigation record because the owner is in the building every day, knows the employees by name, is available to hear employee complaints and steps in to resolve disputes.  It goes without saying – if the employee has a process within the company to make a complaint, and feels that the company treats the complaints seriously, most issues can be resolved.  Once the employee feels that he or she is not being heard, or treated fairly within the company, they start looking toward litigation to resolve disputes. 

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.