In what has become an annual tradition, California – that fabled workers’ paradise on earth – has enacted a slew of new laws that, come January, may keep even the most hearty HR professionals up at night.
As we reported earlier this year (here), the California Chamber of Commerce initially identified 11 “Job Killer Bills” that were introduced early in the legislative session, but only three of those bills made it into the statute books. The other eight either died in committee, were amended to be more palatable to employers, or were vetoed by the Governor.
So, here is a brief description of the new crop of employment laws that you should know about before they become effective on January 1, 2024:
| Law | Summary & Impact on Employers | Action |
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Gonzalez, D-Long Beach | More Paid Sick Leave. As we reported here, SB 616 increases the amount of paid sick leave employers are required to provide employees from 3 days (24 hours) to 5 days (40 hours). Tagged a “Job Killer” bill, it also raises the total amount of paid sick leave employers must permit employees to accrue and carry over from one year to the next from 6 days (48 hours) to 10 days (80 hours). | SIGNED INTO LAW |
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Wiener, D-San Francisco | Another Assault on Arbitration. As we have reported below, one of the things the California Legislature loves to hate the most is arbitration. In a seemingly clear deviation from existing US Supreme Court precedent and the Federal Arbitration Act (“FAA”), this “Job Killer” statute amends California Code of Civil Procedure § 1294 (based upon a statute that has been on the books since at least 1927) to eliminate the long-standing automatic stay of trial court proceedings that takes effect while an appeal is pending from the denial of a motion to compel arbitration. This means a trial court judge will have the discretion to order an employer to continue litigating in court (including going through with a jury trial) even while the employer is challenging on appeal a denial of its right to arbitrate. Only time will tell if this new law will be struck down by a federal court applying the FAA. | SIGNED INTO LAW |
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Holden, D-Pasadena |
Right of Recall for Grocery Store/Distribution Center Employees. Existing law establishes grocery worker retention provisions that require a buyer of an existing grocery store to retain employees for a 90-day transition period, during which an employee may only be discharged for cause and must be considered for continued employment after the transition period. The existing definition of “grocery establishment” means a retail store that is over 15,000 square feet in size and that sells primarily household foodstuffs for offsite consumption. Another “Job Killer” bill, this law broadens the statute to include “distribution centers” owned and operated by a “grocery establishment” regardless of square footage. Creating a new private right of action, the new law also grants employees, union representatives and nonprofit corporations the ability to file an action in court for violation of an employee’s right under this law. Potential damages include civil penalties, liquidated damages, reinstatement, lost wages and benefits, punitive damages, attorney’s fees and costs. | SIGNED INTO LAW |
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Durazo, D-Los Angeles | Minimum Wage Increase for Health Care Workers. The new law provides for a multi-faceted statewide minimum wage schedule for healthcare workers employed by certain covered healthcare facilities. The definition of “covered health facility” applies to nearly every type of health care facility, except those owned, controlled, or operated by the California Department of State Hospitals and certain tribal clinics and outpatient facilities. SB 525 consists of 5 separate minimum wage schedules for covered health care employees depending on the nature, size, and structure of the employer’s business. The law applies to “covered health care employees,” which includes a broad array of positions, from patient care roles like nurses and physicians to support positions such as janitors and clerical workers. It also extends to contracted or subcontracted employees when the healthcare facility has control over their wages, hours, or working conditions. The wage increases go into effect beginning June 1, 2024. Because of amendments that allow for phased minimum wage increases based on hospital size and operations, the Chamber of Commerce withdrew its “Job Killer” tag. The framework of this new law is extremely nuanced, and we suggest reaching out to counsel with questions about its application and interpretation. | SIGNED INTO LAW |
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Durazo, D-Los Angeles |
COVID-19 Right of Recall Extended. As we reported here in 2021, SB 93 required certain employers in the hospitality and service industries to rehire employees laid off due to the COVID-19 pandemic. SB 723 moves the expiration of this “right of recall” for hospitality and service industry employees from December 31, 2024 to December 31, 2025 and adds a presumption that separation due to lack of business, reduction in force, or other economic, non-disciplinary reasons is due to a reason related to the COVID-19 pandemic. Initially, the bill presumed all layoffs were due to the pandemic without the opportunity for employers to submit evidence to the contrary. The Chamber of Commerce withdrew its “Job Killer” tag after amendment. | SIGNED INTO LAW |
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Caballero, D-Merced
| Prohibition Against Non-Compete Agreements. This bill establishes that any contract that is void under California’s non-compete prohibition is unenforceable regardless of when and where the contract was signed. It also prohibits an employer from attempting to enforce a contract that is void, regardless of whether the contract was signed and the employment was maintained outside of California. Thus, SB 699 invalidates non-competes that were signed by employees working in states that allow such agreements, where the employee thereafter moves to California to take a job in California. An employer that enters into or seeks to enforce an unlawful noncompete will be considered to have committed a civil violation. Further, employees may sue for violations of this new law and seek recovery of damages, injunctive relief, and attorneys’ fees. | SIGNED INTO LAW |
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Bauer-Kahan, D-Orinda | Codification of Non-Compete Ban. This bill codifies the holding in Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937 (2008), which states that any non-compete, no matter now narrowly tailored is void. It also clarifies that California’s invalidation of noncompete agreements is not limited to contracts in which the person being restrained from engaging in a lawful profession, trade, or business is a party to the contract. Additionally, AB 1076 creates a new notice requirement by which employers must notify current and former employees in writing by February 14, 2024 of any earlier-signed noncompete clause or agreements that are void. | SIGNED INTO LAW |
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Rubio, D-Baldwin Park
| Leave for Reproductive Loss. This bill allows for unpaid leaves of absence for reproductive-related losses, such as a failed adoption or surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction. The leave must be taken within 3 months of the event. If an employee experiences more than one reproductive loss event in a 12-month period, the employer is not obligated to grant more than 20 days of leave. Unless existing company policy provides for paid leave, the leave entitlement is unpaid, but employees may still use other leave balances, including accrued available sick leave. | SIGNED INTO LAW |
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Bradford, D-Los Angeles
| Expansion of Marijuana-Use Protections. This bill expands AB 2188, which passed last year (and which we discussed here). With some exceptions, AB 2188 prohibits discrimination in hiring, terminating, or any other term of employment on the basis of: (1) a person’s use of cannabis off the job and away from the workplace; and (2) an employer-required drug screening test that has found the person to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids. SB 700 also makes it unlawful to discriminate against a job applicant based on information regarding prior use of cannabis that is learned from a criminal history report. Like SB 700, AB 2188 goes into effect on January 1, 2024. | SIGNED INTO LAW |
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Smallwood-Cuevas, D-Los Angeles
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Retaliation Rebuttable Presumption. SB 497 creates a rebuttable presumption of retaliation under Labor Code sections 98.6 and 1197.5 if an employer engages in any adverse action within 90 days of an employee’s protected activity (e.g., making complaints or claims related to rights under the jurisdiction of the Labor Commissioner, making complaints about unpaid wages, or making complaints about equal pay violations). This presumption makes it easier for employees to establish a prima facie case and significantly more difficult for employers to obtain dismissal of such retaliation claims at the summary judgment stage. The bill also increases the civil penalty imposed on an employer under section 1102.5 from $10,000 generally to $10,000 per employee per violation. | SIGNED INTO LAW |
The “Job Killer Bills” that did not make the cut this year are listed here:
| Bill | Summary & Impact on Employers | Action |
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Portantino, D-Burbank | No Unemployment for Striking Employees. SB 799 would have allowed striking workers to obtain unemployment benefits when they choose to strike. Because employers pay the UI fund, had it become law, SB 799 would have forced employers to effectively subsidize striking employees at unrelated businesses, increased taxes on employers, and put the state into further debt. |
VETOED
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Wicks, D-Oakland | No Protected Status for “Family Caregiver”. In a second loss in as many years for Assemblymember Wicks, Governor Newsom vetoed this bill to expand California’s Fair Employment and Housing Act (“FEHA”) to include “family caregiver status” as a protected characteristic (along with race, religion, color, national origin, disability, sexual orientation, etc.). In a refreshingly out-of-character veto message found here, the Governor admitted the ambiguity of the bill would make it “difficult to implement and lead to costly litigation for employers in California.” Assemblymember Wicks proposed a similar bill last year, which sought to add “familial responsibilities” as a protected category under FEHA but did it not advance beyond the Assembly. | VETOED |
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Smallwood-Cuevas, D-Lake Elsinore | Chain Employers Free from Chains of Employee Transfer Rights. If signed into law, SB 627 would have required chain business employers sharing a brand and parent company that have 100+ locations nationwide to (1) provide 60 days’ notice before closing any location of the chain business; and (2) provide employees of the closing location who have worked for the chain for at least six months the opportunity to remain employed and transfer to another chain business location within 25 miles of the closing location as positions become available. Governor Newsom recognized the arbitrary and ambiguous nature of the law and significant burden on employers in his veto message. | VETOED |
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Wahab, D-Hayward | Employer Speech. SB 399 would have prevented employers from requiring employees to attend meetings in which the employer could share its opinions on religious or political matters, including unionization. It also would have provided a private right of action for employees who believed they suffered discrimination, retaliation, or other adverse employment action from their refusal to attend an employer-sponsored meeting. | FAILED IN COMMITEE |
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Bonta, D-Oakland | No Presumption Of Illness or Injury for Hospital Employees Seeking Workers’ Compensation Benefits. This bill would have added new provisions to the Labor Code creating a rebuttable presumption that certain illnesses and injuries suffered by hospital employees who provide direct-patient care were incurred in the course of their employment, for the purpose of claiming workers’ compensation benefits. The bill would have significantly increased costs for public and private hospitals and been a further drain on the workers’ compensation system. Like the identical bill (SB 213) proposed last year, this bill died in committee. | FAILED IN COMMITEE |
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Smallwood-Cuveas, D-Lake Elsinore | Blanket Prohibition on Consideration of Conviction History in Employment. This bill would have prohibited nearly every employer from considering the criminal conviction history of an applicant or existing employee in employment decisions, regardless of how the information was obtained, and would have imposed cumbersome processes on employers blocking them from refusing to hire individuals with certain convictions. Employers also would have been prohibited from asking employment applicants to share with an employer their personal social media accounts. | FAILED IN COMMITTEE |
So, there they are! Another year, another avalanche of shiny new employment laws on the statute books of the Golden State. And although some of this year’s “Job Killers” didn’t cross the finish line, we’re sure they still remain a glint in some lawmaker’s eye, because there’s always next year! We will continue to monitor the application and enforcement of these new laws and provide relevant updates as needed.