11/27/2023 | News release | Archived content
As we enter the final months of 2023, California employers should turn their attention to the employment-related bills that Governor Newsom recently signed into law, many of which take effect on January 1, 2024. Summaries of key developments are below.
Expansion of Non-Compete Prohibition
As discussed in our prior posts (see here and here), two new laws-SB 699 and AB 1076-build on California's prohibition of non-competes under Section 16600 of the California Bus. & Prof. Code and increase the litigation risk for employers who require or attempt to enforce unlawful employee non-compete provisions. Most urgently, AB 1076 requires employers to provide a written notice by February 14, 2024 to employees and former employees (employed after January 1, 2022) who are subject to a non-compete clause or agreement that is void under California law.
Paid Sick Leave Increase
SB 616 amends California's paid sick leave law, the Healthy Workplaces, Healthy Families Act ("HWHFA"), to increase the minimum number of paid sick leave days an employer must provide and permit an employee to use annually, and to raise the annual sick leave accrual cap an employer may impose.
Under existing law, employers may use either (i) the statutory accrual rate of one hour of leave per every 30 hours worked or (ii) an alternative accrual rate that permits employees to accrue 24 hours (or three days) of sick leave by the 120th calendar day of employment (and of each subsequent year). Now, under SB 616, employers may use an alternative accrual rate only if employees accrue at least 24 hours (or three days) of sick leave by the 120th calendar day and an additional 16 hours by the 200th calendar day of employment, such that they have at least 40 hours (or five days) of sick leave accrued by their 200th calendar day of employment (and of each subsequent year). Significantly, SB 616 also increases the sick leave accrual cap to 80 hours (or 10 days) from the current 48 hours (or six days).
Furthermore, existing law permits employers to frontload sick leave rather than use an accrual-based method. Employers that use the frontloading method must provide employees at least 24 hours (or three days) of paid sick leave for use by the employee's 120th calendar day of employment (and of each subsequent year). Under SB 616, employers that use the frontload method must provide employees at least 24 hours (or three days) by the 120th calendar day of employment and 40 hours (or five days) of paid sick leave available to use by the employee's 200th calendar day of employment (and of each subsequent year). The benefit of the frontload method is that employers do not need to carry over accrued but unused sick leave time.
Regardless of whether employers use an accrual or frontload method, employers must now permit employees to use 40 hours (or five days) of paid sick leave per each year, up from the previous 24 hours (or three days).
Finally, SB 616 expands certain paid sick leave protections to employees covered by a collective bargaining agreement. It allows employees covered by a collective bargaining agreement who are otherwise exempt from HWHFA to use paid sick leave, like other employees, for the diagnosis, care or treatment of an existing health condition of, or preventative care for, an employee or an employee's family member, and for certain other purposes related to domestic violence, sexual assault, or stalking.
Employers should review and revise their sick leave and PTO policies to account for the increase in usage and accrual of paid sick leave for California-based employees, and should coordinate with third party payroll and benefits administrators as needed. Employers should also note that they will need to continue to comply with any more generous paid sick leave provisions under local paid sick leave laws, such as those in Berkeley, Emeryville, Los Angeles, Oakland, San Diego, San Francisco, and Santa Monica.
New Leave for Reproductive Loss
SB 848 amends the California Fair Employment and Housing Act ("FEHA") to require employers with five or more employees to provide up to five days of leave for reproductive loss. This new leave is in addition to any leave available under CFRA and the five days of bereavement leave added to FEHA last year.
Under the new law, employees who have been employed for at least 30 days may take up to five days of leave following a reproductive loss event. The leave must be completed within three months of the event, although an employee who is eligible for leave for the event under any other state or federal leave entitlement may take their FEHA reproductive loss leave within three months of the end date of the other leave. The leave is available for multiple reproductive loss events, although an employer is not required to grant more than 20 days of leave in a 12-month period.
A "reproductive loss event" means a failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction. The leave extends to a current spouse, domestic partner, or an individual who would have been a parent to the child, or adopted the child, had it not been for the reproductive loss event.
The leave may be unpaid unless the employer has an existing policy that provides paid leave for reproductive loss. Employees must be permitted to use vacation, sick leave, or other compensatory paid time off that is otherwise available to the employee. Employers may not retaliate against an employee for exercising rights under this new leave law, and must maintain the confidentiality of any employee requesting reproductive loss leave.
Employers should review and revise their leave policies to provide for this new reproductive loss leave.
Employee Protections from Defamation Claims
Under the California Civil Code, certain types of communications are considered privileged and protected from civil defamation action. AB 933 amends the Civil Code to provide that a communication made by an individual, without malice, regarding an incident of sexual assault, harassment, or discrimination, is privileged. The privilege applies to an individual who has or had a reasonable basis to file a complaint of sexual assault, harassment, or discrimination, whether or not the complaint was filed. "Communication" means factual information related to an incident of sexual assault, harassment, or discrimination experienced by the individual making the communication, including an act of workplace harassment or discrimination. A prevailing defendant in any defamation action brought against them for making a privileged communication may obtain reasonable attorney's fees and costs, plus treble damages for any harm caused by the defamation action, punitive damages, and other relief otherwise permitted by law.
This new law joins other recently enacted laws, such as California's Silenced No More Act (which took effect in 2022), to limit employer action against an employee who makes an allegation of sexual assault, harassment, or discrimination.
Inquiries Regarding Applicant Cannabis Use
Last year, Governor Newsom signed into law AB 2188, which amended FEHA to prohibit discrimination in hiring, termination, or any term or condition of employment based on an individual's off-duty use of cannabis away from the workplace. That law is scheduled to take effect on January 1, 2024. SB 700 expands these provisions to also prohibit employers from requesting information from an applicant relating to the applicant's prior use of cannabis. Information about prior cannabis use obtained from the person's criminal history is exempt if the employer is permitted to consider or inquire about that information under a specified provision of FEHA or other state or federal law. The new law also clarifies that it does not preempt state or federal laws requiring applicants or employees to be tested for controlled substances. These amendments also take effect on January 1, 2024.
Employers should revisit their background check and candidate screening practices to ensure that they are not requesting impermissible information about prior cannabis use. Employers should train personnel involved in the hiring and screening process regarding impermissible inquiries into employee and applicant cannabis use.
Rebuttable Presumption of Retaliation Under Labor Code
SB 497 makes it easier for a plaintiff to establish a prima facie case of retaliation under the Labor Code, including under the California Equal Pay Act, which is codified as Labor Code Section 1197.5. Generally, employers are prohibited from discharging an employee or taking any discriminatory, retaliatory, or other adverse action against an employee or applicant because the individual engaged in protected conduct under the Labor Code, including the California Equal Pay Act (such as filing a complaint or otherwise exercising rights under those provisions). SB 497 now creates a rebuttable presumption of retaliation if the employer takes adverse action against an employee within 90 days of the employee having engaged in protected activity.
Workplace Violence Prevention Plans
Under California's Occupational Safety and Health Act, employers have long been required to establish, implement, and maintain an effective illness and injury prevention plan. Effective July 1, 2024, SB 533 requires employers of 10 or more employees to establish, implement, and maintain, at all times in all work areas, an effective written workplace violence prevention plan. The plan must include, among other things, procedures to:
The new law will also require employers to maintain a violent incident log that includes specified types of information. The logs must be maintained for a minimum of five years and be made available for examination and copying upon request by Cal-OSHA.
Although employers have until mid-2024 to establish a violence prevention plan, they should get an early start on the process by carefully reviewing the new requirements and deputizing HR and key operations personnel to outline and draft the plan by the mid-year deadline.
Temporary Restraining Orders on Behalf of Employees Suffering Harassment
Section 527.8 of the Code of Civil Procedure authorizes an employer to seek a temporary restraining order ("TRO") and an injunction on behalf of an employee and other employees based on a credible threat of violence that can reasonably be construed to be carried out or to have been carried out at the workplace. SB 428 amends the law, effective January 1, 2025, to permit employers to seek court intervention for harassing behavior-not just threats of violence-aimed at their employees. Specifically, it authorizes any employer whose employee has suffered harassment to seek a TRO and an injunction on behalf of the employee and other employees. For purposes of this law, "harassment" means a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose. The course of conduct must be that which would cause a reasonable person to suffer substantial emotional distress, and must actually cause substantial emotional distress.
In order to obtain a TRO or injunction, the employer must show clear and convincing evidence that the employee suffered harassment, great or irreparable harm would result to the employee, and the course of conduct served no legitimate purpose. Prior to filing the petition, the employer must also provide the employee for whom the protection is sought the opportunity to be named in the order. Furthermore, courts are expressly prohibited from issuing an order to the extent that the order would prohibit speech or activities protected by the National Labor Relations Act.