As we approach the last few months of the year and plan ahead for 2023, we prepared this update to provide an overview of some of the latest legal developments and key new laws going into effect next year, some of which will require modifications to employment-related policies and practices in order for CA businesses to remain in compliance. Please note that this is not a comprehensive account of all significant legal developments, but rather a summary of those laws that will impact many of our clients. If you have any questions about employment laws impacting your specific business, please contact us.
Increased Statewide Minimum Wage
Effective January 1, 2023, the state minimum wage will increase to $15.50/hr. As we shared with you earlier this year, a number of cities, including LA, Santa Monica, and West Hollywood, have local minimum wages that are higher than the state minimum wage. Employers need to comply with whichever law affords employees the highest minimum wage. Also keep in mind that increases in the state minimum wage impact those employees that have been classified as exempt salaried workers because exempt salaried workers generally must be paid a base salary that is at least twice the state minimum wage for full-time employment (40 hours per week). Therefore, as of January 1, 2023, most exempt salaried workers must be paid no less than $64,480 to retain exempt status. Employees who have been misclassified as exempt can seek damages and penalties for unpaid overtime, missed meal and rest breaks, interest, and attorney’s fees.
New Mandatory Unpaid Bereavement Leave (applicable to employers with 5+ employees)
A new law going into effect January 1 will entitle eligible employees (those who have worked for the employer for at least 30 days) to take up to 5 days of bereavement leave for the death of a family member. The leave must be taken within 3 months of the date of death and need not be taken consecutively. The leave may be unpaid, or the employee may use accrued, unused vacation or sick leave. Employers may request documentation confirming the death. Employers are prohibited from discriminating or retaliating against employees for using bereavement leave and must maintain information related to bereavement leave as confidential.
Anti-Discrimination Laws Extended to Protect Reproductive Health Decisionmaking and Cannabis Users (applicable to employers with 5+ employees)
The CA Fair Employment and Housing Act (FEHA) is the primary law in our state prohibiting employment-related discrimination, harassment, and retaliation on the bases of race, gender, disability, pregnancy, and other protected characteristics. Effective January 1, 2023, employees will also be protected under FEHA based on their reproductive health decisionmaking, defined broadly to include “a decision to use or access a particular drug, device, product, or medical service for reproductive health.” According to a press release, the law “seeks to expand and modernize birth control access in California, and ensure greater contraceptive equity statewide.”
Moreover, effective January 1, 2024, it will be illegal under FEHA for an employer to discriminate against an individual as a result of their use of cannabis off the job and away from the workplace, including that employers will not be able to take adverse action against employees found to have nonpsychoactive cannabis metabolites in their body through a drug test. Employees may still be prohibited from possessing, using, or being impaired by cannabis while on the job, and employers will still be able to conduct drug testing provided that the test does not screen for nonpsychoactive cannabis metabolites. The statute will not apply to employees in the building and construction trades and also doesn’t apply to applicants or employees hired for positions requiring federal government background investigations.
Family Care and Paid Sick Leave Extended to Cover Caring for “Designated Persons”
The California Family Rights Act (CFRA) applies to CA businesses with 5 or more employees, and it entitles eligible employees to take up to 12 weeks of job-protected, unpaid time off work for the following reasons: (1) to care for their own serious health condition, (2) to care for the serious health condition of a “family member” (currently defined as the child, parent/parent-in-law, grandparent, grandchild, sibling, or spouse/domestic partner of the employee), (3) to bond with a newborn baby or a child newly placed with the employee for adoption or foster care, and (4) for certain military purposes. Effective January 1, 2023, the definition of “family member” will be expanded to include a “designated person,” defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” This means that employers will need to allow eligible employees to take up to 12 weeks of job-protected time off work to provide care for such “designated persons” who have a serious health condition. The employee does not need to identify this person in advance and may instead identify this person at the time they request the leave. However, employers may limit employees to one “designated person” per 12-month period for CFRA leave purposes.
Based on a separate provision in the new law, employees also will be entitled to use their paid sick leave to take time off work to care for a “designated person” – but here, the definition of “designated person” is defined more broadly to cover any person identified by the employee at the time the employee requests the paid sick leave. Employers may limit employees to one designated person per 12-month period for purposes of paid sick days.
New Pay Data Transparency & Reporting Requirements
Existing law requires employers to pay employees who perform “substantially similar work” equally and prohibits disparities based on employees’ race, sex, or ethnic background. Existing law also prohibits employers from seeking salary history information from applicants for employment and further prohibits employers from using prior salary as a justification for any disparity in compensation between employees. Employers also may not prohibit employees from discussing their wages.
Effective January 1, 2023, employers will be required, upon an employee’s request, to provide the employee the pay scale for the position in which the employee is currently employed. Moreover, employers with 15 or more employees will also be required to include the pay scale for a position in every job posting, whether posted by the employer directly or whether posted through a recruiter. Employers who fail to comply will be subject to penalties ranging from $100 to $10,000 per violation.
Additionally, employers with 100+ employees will be required to provide a detailed pay data report to CA’s Civil Rights Department annually every May starting in 2023. The report will be required to contain specific information regarding number of employees by race, ethnicity, and sex in various job categories along with median and mean pay rates. Employers who fail to file the required report will be subject to penalties.
New Protections for Employees During “Emergency Conditions”
Effective January 1, CA employers will be prohibited from taking or threatening adverse action against employees who refuse to report to, or leave, the worksite because the employee has a reasonable belief that the workplace is unsafe. Certain employees are excluded from the protections of this law, including employees who are required by law to render aid or remain on the premises in the event of an emergency, employees of health care facilities who provide direct patient care, and employees of licensed residential care facilities. Additionally, employers will be prohibited from preventing employees from accessing the employee’s mobile or other communications device for seeking emergency assistance, assessing the safety of the situation, or communicating with a person to verify their safety. “Emergency condition” is defined as a condition of disaster or extreme peril to the safety of persons or property at the workplace caused by natural forces or a criminal act, or an order to evacuate a workplace or the worker’s home or the school of a worker’s child due to a natural disaster or criminal action.” Under the law, an “emergency condition” does not include a health pandemic. The law does not apply “when the emergency conditions that pose an imminent and ongoing risk of harm to the workplace, the worksite, the worker, or the worker’s home have ceased.”
COVID Supplemental Sick Leave Extended Through December 31, 2022 (applicable to employers with 26+ employees)
Employers with 26 or more employees have been legally required to provide employees with supplemental sick leave in the event they are unable to work due to specified COVID-related reasons. This law, which was scheduled to sunset on September 30, 2022, has now been extended to sunset on December 31, 2022. The extension does not give employees any new bank of paid time off; it simply extends the period of time in which employees are entitled to utilize the bank of time they were granted when the law originally went into effect.
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Given the many legal changes going into effect next year, all California employers should update their handbooks and personnel policies to bring them into compliance for 2023. If you have any questions about these new laws or would like us to review or revise your handbooks, employment-related agreements, or other employment-related documentation to bring it up to date in light of the new legislation, please contact us. The new year is a good time to roll out handbook updates and implement other changes to your personnel practices.
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The above summary has been prepared for general informational purposes only and is not intended as legal advice.
Bernstein & Friedland, P.C. is a boutique employment law firm in Los Angeles specializing in wrongful termination, discrimination, harassment, retaliation, and unpaid wage and overtime matters. Please visit our website at www.laemploymentcounsel.com to learn more about us. We are here to support you if you have questions about any of the above or any other employment-related matters.