Update: On December 2, 2024, California updated its Paid Sick Leave Frequently Asked Questions, which address the expanded reasons for use of California paid sick leave detailed below. 

Seyfarth Synopsis:  Out with the old and in with the new.  Governor Newsom recently signed new laws which extend and clarify employees’ available reasons for use of California paid sick leave.  There are expanded unpaid leave protections for victims of domestic violence, sexual assault, stalking, or qualifying acts of violence, as well as for employees summoned to jury duty or responding to a subpoena or court order to testify under FEHA.  The changes go into effect on January 1, 2025.  

As we previously detailed, in 2023, the California legislature significantly expanded the state’s Healthy Workplaces, Healthy Families Act of 2014 (HWHFA), primarily by providing more leave.  This year, Governor Newsom signed bills into law that expand paid sick leave protections. 

Preventative Care for Outdoor Workers

In the last few years, California employment laws have zeroed in on extreme conditions.  For example, Cal/OSHA implemented heat illness standards, and employees cannot be retaliated against for refusing to report to work in emergency conditions.  In this vein, SB 1105  provides that agricultural employees who work outside may use PSL to avoid smoke, heat, or flooding conditions created by a local or state emergency, including when a worksite is closed due to these conditions.  The legislature considered this a clarification of the HWHFA’s provision that PSL can be used for preventive care even though the previous FAQs did not contemplate this definition.  

Victim Status Extended And PSL Used As Safe Time 

SB 1105 and AB 2499 collectively brought more expansive changes. Existing law provides for using PSL where there is domestic violence, sexual assault, and stalking; it will now be available to victims of “qualifying acts of violence,” i.e., conduct, or patterns of conduct that justify safe time, including when:

  1. an individual causes bodily injury or death to another individual;
  2. an individual exhibits, draws, brandishes, or uses a firearm, or other dangerous weapon, with respect to another individual; and
  3. an individual uses, or makes a reasonably perceived or actual threat to use, force against another individual to cause physical injury or death. 

PSL Available If A Family Member Is A Victim 

The HWHFA previously limited use of PSL for safe time to when an employee was a victim.  The combination of SB 1105 and AB 2499 extends this category of leave to employees whose family members are victims as well.  (And, as a reminder, as of January 1, 2023 the HWHFA’s definition of “family member” was expanded to include a “designated person” of the employee.)

More Reasons To Use PSL 

Previously, an employee-victim could only use PSL for their own reasons (not to assist a family member) in a handful of specific categories.  AB 2499 extends existing rights to take time to obtain restraining orders, seek medical attention, obtain certain services or counseling and participate in safety planning to family members.  It also creates new explicit rights to take time for relocation, enrolling children in a new school, obtaining legal services, participating in legal proceedings and obtaining childcare in connection with qualifying acts of violence.

The law also allows employees to use paid sick leave for time spent serving on a jury or a victim who takes time off to appear as a witness in court in compliance with a subpoena or court order.

Protecting Leave For Jury Duty, Victims, And Subpoenaed Witnesses Under FEHA

Previously the California Labor Code afforded unpaid leave protections for jury duty, victims serving as witnesses in compliance with a subpoena or court order, and victims of domestic violence, sexual assault, stalking, or crimes.  AB 2499 reformulates these protections under the umbrella of the Fair Employment Housing Act.  This shift gives the Civil Rights Department (“CRD”) enforcement authority over violations of these protections, and eliminates potential Private Attorneys’ General Act claims for such violations.

This move came with additional changes, including limiting the duration of leave employers with at least 25 employees must provide.  First, a victim of a qualifying act of violence may take no more than 12 weeks of unpaid leave.  Second, if an employee’s family member is a victim of a non-fatal crime, and the employee takes leave for the limited purpose of relocating or securing a new residence and enrolling a child in a new school or child care, the employee may take no more than 5 days of leave.  Third, when an employee’s family member is a victim of a non-fatal crime, the employee may take no more than 10 days of leave.

Absences that would also qualify under the Family and Medical Leave Act (FMLA) or CFRA must run concurrently if the employee is eligible. 

AB 2499 also expands eligibility for reasonable accommodations to include employees who are victims, or whose family members are victims of a qualifying act of violence to ensure the safety of the employee while at work. 

Required Notice

Employers must inform employees of their rights under AB 2499 at the time of hire, annually, upon request, and if an employee provides notice that their family member is a victim as defined under the law. 

The CRD will be developing a form that complies with these notice requirements before July 1, 2025—six months after the law goes into effect. 

Workplace Solutions

As AB 2499 and SB 1105 go into effect in less than three months, here are some next steps for employers to consider:

    • Review existing leave policies and practices to ensure compliance with the new laws, including related attendance, conduct, anti-retaliation, and discipline policies and practices.

    • Train supervisory and managerial employees, and HR on the new requirements.

    • Develop a form to comply with the notice requirements to use in advance of the CRD’s development of a form.

Seyfarth is here to help employers with solutions and recommendations to comply with California and nationwide paid leave requirements. Check out the CalPeculiarities Blog for updates on other laws affecting California employers.

Edited by Elizabeth Levy

Seyfarth Synopsis: With the Governor’s September 30 deadline to sign bills behind us, we review the employment bills that made the cut to become laws, as well as those that didn’t survive the season. The most notable new laws read intersectionality into FEHA protected categories, recast victims’ time off provisions, adjust paid family leave, and impact protections for freelance workers and whistleblowers.

We previously detailed the cornucopia of key bills California legislators introduced in 2024. Below is our summary of the labor and employment bills the Governor signed into law and key measures that were vetoed. All new laws are effective January 1, 2025, unless otherwise stated.

Soon-to-be-New Laws

SB 1137– Protected Characteristics: Intersectionality

SB 1137 makes California the first jurisdiction to explicitly adopt the concept of intersectionality and clarifies how courts should assess overlapping claims under the state’s anti-discrimination laws. As stated in the law, intersectionality “captures the unique, interlocking forms of discrimination and harassment experienced by individuals in the workplace and throughout society, particularly Black women, as compared to Black men and White women.” Under this new law, the Fair Employment and Housing Act (“FEHA”) will expressly protect the intersection, or any combination of the currently-enumerated protected characteristics from discrimination. 

The bill amends Sections 12920 and 12926 of the Government Code (also amends the Unruh Act and Education Code).

AB 1815 – Race Discrimination – Hairstyles

AB 1815 expands the definition of “race” under the FEHA by removing the term “historically” and including traits associated with race beyond hair texture and protective hairstyles. The new law will also add definitions for “race” and “protective hairstyle” to the Unruh Act.

The bill amends Section 51 of the Civil Code, Section 212.1 of the Education Code, and Section 12926 of the Government Code.

SB 1340 – Discrimination: Local Enforcement

AB 1340 specifies that nothing in the FEHA limits or restricts efforts by any city, county or other political subdivision of the state to enforce local anti-discrimination laws if certain requirements are met. Local laws can be enforced when an employment complaint has been filed with the CRD after the CRD has issued a right to sue notice (but before the expiration of the time to file a civil action in the notice) and the local law at issue is at least as protective as the FEHA. The law requires the CRD to promulgate regulations governing local enforcement pursuant to these provisions.

The bill amends Section 12993 of the Government Code.

AB 2499 – “Victims” Time Off

AB 2499 expands and recasts jury, court, and victim time off provisions as unlawful practices under the FEHA (previously addressed in the Labor Code), placing them under the CRD’s enforcement authority. Specifically, the law prohibits the discrimination/retaliation/discharge of an employee who: takes time off for jury service; takes time off to appear in court as a witness under court order; is a victim and takes time off to obtain relief for their/their child’s health, safety, welfare; and (for employers with 25 or more employees) is a victim/has a family member who takes time off to assist the family member for various reasons related to a qualifying act of violence (instead of crime/crime or abuse). 

Additionally, the new law expands eligibility for reasonable accommodations to include an employee who is a victim/has a family member who is a victim of a qualifying act of violence. Employees will be able to use vacation, personal, and paid sick leave for leaves granted as reasonable accommodations under this provision. Such leave will run concurrently with CFRA/FMLA (if the employee would have been eligible), and be subject to time use limitations. Employers will be required to inform employees of their rights in writing at hire and upon request.

The bill amends Section 214 of the Code of Civil Procedure, Section 48205 of the Education Code; add Section 12945.8 to the Government Code, and amends Section 246.5 of, and repeals Sections 230 and 230.1 of the Labor Code (among other things).

SB 1105 – Paid Sick Leave – Agricultural Employees

SB 1105 expands California’s existing paid sick leave provisions to allow agricultural employees who work outside to use their currently entitled paid sick leave to avoid smoke, heat, or flooding conditions created by a local or state emergency. The law states that its purpose is to confirm that California’s Healthy Workplaces, Healthy Families Act of 2014 (“HWHFA”) provides for the use of paid sick leave under these circumstances under the preexisting “preventive care” reason for use. While this term is not defined in the HWHFA, the Department of Industrial Relations’ FAQs provide that examples of preventive care are annual exams and flu shots. To the extent the legislature intended for “preventive care” to be a more expansive term, SB 1105 provides an important clarification.

This bill amends Section 246.5 of the Labor Code.

SB 1100 – Discrimination: Driver’s License

SB 1100 prohibits statements in employment materials (such as a job advertisement, posting, or application) that an applicant must have a driver’s license. The only exceptions are if the employer reasonably expects the position’s duties to require driving and reasonably believes that an alternative form of transportation would not be comparable in travel time or cost to the employer. Alternative forms of transportation may include a ride hailing service, taxi, carpooling, bicycling, or walking.

The bill amends Section 12940 of the Government Code.

SB 399 – Captive Meetings Ban

SB 399 prohibits an employer from subjecting or threatening discrimination or adverse action against any employee who declines to attend or participate in, receive, or listen to an employer-sponsored meeting or communications regarding the employer’s opinion about religious or political matters. The new law requires employers to continue paying employees who refuse to attend such meetings, and imposes a civil penalty of $500 per employee for each violation. We may well see challenges to this new law, as opponents of the bill were vocal that it is preempted by the NLRA.

The bill adds Chapter 9 (commencing with Section 1137) to Part 3 of Division 2 of the Labor Code.

AB 2123 – Paid Family Leave  

Under AB 2123, employers can no longer require employees to take up to two weeks of earned and unused vacation before the employee’s initial receipt of paid family leave benefits during any 12-month period in which employees are eligible for these benefits.

The bill amends Section 3303.1 of the Unemployment Insurance Code.

AB 1888 – DOJ Labor Trafficking Unit

Governor Newsom approved AB 1888 to establish a Labor Trafficking Unit within the DOJ that will “increase leadership and coordination among state agencies to combat labor trafficking in California.” The Governor signed three other non-employment-related human trafficking bills the same day: AB 2020, SB 963, and SB 1414.

The bill adds and repeals Section 12530.5 to the Government Code.

AB 3234 – Social Compliance Audit

AB 3234 requires an employer that has voluntarily subjected itself to a “social compliance audit” relating to labor laws (regardless of whether the audit is to determine if the employer uses child labor) to post a report detailing the findings of its compliance with child labor laws on its website. The new law defines a “social compliance audit” as a voluntary, nongovernmental inspection or assessment of an employer’s operations or practices to evaluate whether the operations or practices are in compliance with state and federal labor laws, including wage and hour and health and safety regulations, including those regarding child labor.

The bill adds Chapter 1.5 (commencing with Section 1250) to Part 4 of Division 2 of the Labor Code.

AB 2738 – Labor Code Enforcement and OSHA Training

In an effort to address worker injuries and fatalities at concert festivals, this law requires contracts with entertainment events vendors to provide in writing that upon hire for a live event, the vendor will furnish to the contracting entity certain information about the federal and Cal/OSHA trainings its own employees and subcontractors’ employees have completed.

This new law also authorizes public prosecutors enforcing Labor Code violations to recover all remedies available under the Labor Code, which would go first to workers for unpaid wages, damages, or penalties, and the remainder to the General Fund. It also authorizes recovery of fees and costs to the prevailing plaintiff in such an action.

The bill amends Sections 181, 9251, and 9252 of, and adds Section 9252.1 to the Labor Code.

AB 1034 – PAGA exemption: Construction Industry Employees

AB 1034 extends the current January 1, 2028 expiration date of the PAGA exemption for employees in the construction industry applicable to work performed under a valid collective bargaining agreement in effect any time before January 1, 2025, to 2038.

The bill amends Section 2699.6 of the Labor Code.

SB 988 – “Freelance Worker Protection Action Act”

SB 988 requires a “hiring party” (not limited to an employer) to pay an Independent Contractor (“IC”) on the date specified by the contract, or if unspecified, no later than 30 days after completion of the freelance worker’s services. This new law prohibits requiring the freelance worker to accept less compensation than what is specified by the contract, to provide more goods or services, or to grant additional intellectual property rights as a condition of timely payment. The hiring party and IC will need to enter into a written contract that the hiring party must retain for no fewer than four years. Hiring parties are also prohibited from discriminating  against an IC for asserting rights under these provisions, and the law creates a private right of action with injunctive relief, damages, fees, and costs available.

The bill adds Part 5 (Section 18100 et seq) to Division 7 of the Business and Professions Code.

AB 224 – Newspaper Distributors and Carriers AB 5 Exemption Extension

AB 224 extends the exemption from the application of Dynamex to newspaper distributors working under contracts with publisher/carriers until January 1, 2030, and extends the corresponding mandatory LWDA payroll and wage reporting requirements.

The bill amends Section 2783 of the Labor Code.

AB 2754 – Port Drayage Motor Carriers Contracts – Liability

AB 2754 extends existing Labor Code provisions to port drayage motor carriers. These provisions prohibit a person or entity from entering into contracts for labor or services with certain types of contractors if they know or should have known that the contract does not include sufficient funds to allow the contractor to comply with all applicable employment laws. The law also imposes joint and several liability for customers of port drayage motor carriers where the motor carriers misclassify drivers as independent contractors.

The bill amends Sections 2810 and 2810.4 of the Labor Code.

AB 2364 – Property Service Worker (Janitorial) Protections

AB 2364 increases the payment provided to qualified organizations that provide mandatory sexual violence and harassment prevention training to janitors. The rates will jump from $65 per participant to $200 per participant for training sessions having fewer than 10 participants, and $80 per participant for training sessions with 10 or more participants, except as specified. These enumerated rate hikes will be in effect until January 1, 2026, and then increase each year thereafter. The new law also requires the DIR to contract with the UCLA Labor Center to study opportunities to improve janitorial industry worker safety and rights.

The bill amends Sections 1420 and 1429.5 of, and adds and repeals Section 1429.6 of, the Labor Code.

Bills Already Signed Into Law

Some laws were ahead of the curve, and were signed into law much earlier in the legislative session.

AB 2299 – Whistleblower Protections Posting

AB 2299, signed into law July 15, 2024, requires the Labor Commissioner to develop, and an employer to post, a model list of employees’ rights and responsibilities under the State’s whistleblower laws. An employer is considered compliant with the posting requirement set forth in Labor Code section 1102.8 if the employer posts the model list.

The bill amends Section 1102.8 and adds Section 98.11 to the Labor Code.

AB 2288 and SB 92 – PAGA Compromise

We previously detailed the sweeping PAGA reforms effectuated by AB 2288 and SB 92, which were signed into law on June 21, 2024 and are retroactively effective as of June 19, 2024.

The bills amend Sections 2699 and 2699.5 of the Labor Code, and amend, repeals and add Section 2699.3 of the Labor Code.

AB 2049 – Summary Judgment Filing Deadlines

AB 2049, signed into law on July 15, 2024, changes the deadline for a party to file a motion for summary judgment or summary adjudication from the current 75 days to at least 81 days before the hearing on the motion. The deadlines for filing an opposition are likewise extended from 14 days to at least 20 days before the hearing, and for filing a reply from 5 days to at least 11 days before the hearing. The new law prohibits a party from filing more than one motion for summary judgment against an adverse party (multiple motions for summary adjudication are excluded from this prohibition) without leave of court, and expressly prohibits the introduction of new facts in a reply to an opposition to a motion for summary judgment. 

This bill amends Section 437c of the Code of Civil Procedure.

SB 828 – Minimum Wages: Health Care Workers Delay

SB 828 was signed into law on May 31, 2024 and delayed the implementation of SB 525, the health care minimum wage law signed by Governor Newsom on October 13, 2023. This law moved all minimum wage adjustments in SB 525 by one month, which meant that the minimum wage schedule took effect on July 1, 2024 instead of June 1, 2024. Additionally, all future minimum wage increases scheduled to take place after 2024 will take place on July 1, rather than June 1, of each year.

This bill amends Sections 1182.14 and 1182.15 of the Labor Code.

Bills That Did Not Make the Cut

SB 1022 – CRD Group/Class Civil Action Filing Extension: This bill would have made a variety of changes to FEHA administrative timelines, including changes to tolling rules and extending the deadline for the Civil Rights Department (CRD) Director to file a group or class complaint to seven years from the date of the alleged violation. This would have tacked years onto the CRD’s current time limits to bring systemic complaints, and was the very reason why the Governor vetoed the bill.  Despite the veto, the Governor encouraged the Legislature to try again next year with a more reasonable period for CRD to initiate a group or class complaint.

AB 1832 – CRD Human Trafficking Task Force: This bill would have established a Labor Trafficking Task Force within the CRD, “tasked” with taking various actions and working with various state agencies, to combat labor trafficking. Governor Newsom vetoed the bill as redundant of AB 1888.

SB 1116 – Benefits for Striking Workers: Under this bill, after two weeks of an employee’s absence due to a trade dispute or strike, the employee would have been eligible for unemployment benefits under the Unemployment Insurance Code.

AB 2494 – Employer Notification: This bill would have required all employers, public and private, to provide employees with a written notice of coverage under COBRA, in-person and via email, following termination or reduction in hours.

AB 2930 – AI & Automated Decision Systems: This bill would have regulated the use of automated decision tools in employment pay, promotion, hiring, termination, or task allocation for purposes of determining employment terms or conditions. Expect more action on this topic in years to come, as the Governor’s veto message on AB 1047 previewed.

Workplace Solutions

Sign up for our October 2, 2024 webinar regarding these new laws and the new compliance obligations they create for employers. Visit us at Cal Peculiarities for regular updates on the oddities of California employment law, and check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates.

Edited by Cathy Feldman and Elizabeth Levy

Seyfarth Synopsis: The Legislature concluded its 2023-24 session in the wee hours of its August 31, 2024, deadline to pass bills. Now it’s up to Governor Newsom to call the plays as to what employment bills he will sign into law. The bills for his consideration read intersectionality into FEHA protected categories, recast victims’ time off provisions, adjust paid family leave, and impact protections for freelance workers and whistleblowers.

At the conclusion of its August 31, 2024, deadline, the Legislature passed the proverbial football (bills – not those from Buffalo) to Governor Newsom. By September 30, he’ll decide which employment bills scored a touchdown and will become laws effective January 1, 2025.  Contenders include bills that read intersectionality into FEHA protected categories, recast victims’ time off provisions, adjust paid family leave, and impact protections for freelance workers and whistleblowers. Keep reading for our summary of key employment bills that may soon become law.

Who’s On The Team – Bills That Made The Cut

SB 1137– Protected Characteristics: Intersectionality

SB 1137 would make California the first jurisdiction to explicitly adopt the concept of intersectionality and clarify how courts should assess overlapping claims under the state’s anti-discrimination laws. As stated in the bill, intersectionality “captures the unique, interlocking forms of discrimination and harassment experienced by individuals in the workplace and throughout society, particularly Black women, as compared to Black men and White women.”

If signed into law, FEHA will expressly protect the intersection, or any combination of the currently-enumerated protected characteristics from discrimination. 

The bill would amend Sections 12920 and 12926 of the Government Code (also amend the Unruh Act and Education Code).

SB 1022– CRD Enforcement – Group/Class Civil Action Filing Extension

SB 1022 would make a variety of changes to FEHA administrative timelines, including most notably changes to tolling rules and an extension of the deadline for the Civil Rights Department (CRD) Director to file a group or class complaint to within seven years from the date of the alleged violation. This will tack years onto the CRD’s current time limits to bring systemic complaints. 

The bill would amend Sections 12926, 12960, 12965, 12980, and 12981 of the Government Code.

AB 2499– “Victims” Time Off

AB 2499 seeks to expand and recast jury, court, and victim time off provisions as unlawful practices under FEHA (previously addressed in the Labor Code), which would place them under the CRD’s enforcement authority. Specifically, the bill would prohibit the discrimination/retaliation/discharge of an employee who: takes time off for jury service; takes time off to appear in court as a witness under court order; is a victim and takes time off to obtain relief for their/their child’s health, safety, welfare; and (for employers with 25 or more employees) is a victim/has a family member who takes time off to assist the family member for various reasons related to a qualifying act of violence (instead of crime/crime or abuse). 

Additionally, the bill would expand eligibility for reasonable accommodations to include an employee who is a victim/has a family member who is a victim of a qualifying act of violence.  Employees would be able to use vacation, personal, and paid sick leave for leaves granted as reasonable accommodations under this provision. Such leave would run concurrently with CFRA/FMLA, and be subject to time use limitations. Employers would be required to inform employees of their rights in writing at hire and upon request.

The bill would amend Section 214 of the Code of Civil Procedure, Section 48205 of the Education Code; add Section 12945.8 to the Government Code, and amend Section 246.5 of, and repeal Sections 230 and 230.1 of the Labor Code (among other things).

SB 1100 – Discrimination: driver’s license

SB 1100 would prohibit statements in employment materials (such as a job advertisement, posting, or application) that an applicant must have a driver’s license. The only exceptions would be if the employer reasonably expects the position’s duties to require driving and reasonably believes that an alternative form of transportation would not be comparable in travel time or cost to the employer. Alternative forms of transportation may include a ride hailing service, taxi, carpooling, bicycling, or walking.

The bill would amend Section 12940 of the Government Code.

SB 399– Captive Meetings Ban

SB 399 would prohibit an employer from subjecting or threatening discrimination or adverse action against any employee who declines to attend or participate in, receive, or listen to an employer-sponsored meeting or communications regarding the employer’s opinion about religious or political matters. The bill would require an employer to continue to pay an employee who refuses to attend such a meeting, and would impose a civil penalty of $500 per employee for each violation. Opponents of the bill have been vocal that it is preempted by the NLRA.

The bill would add Chapter 9 (commencing with Section 1137) to Part 3 of Division 2 of the Labor Code.

AB 2123 – Paid Family Leave  

AB 2123 would eliminate employers’ ability to require an employee to take up to two weeks of earned and unused vacation before the employee’s initial receipt of paid family leave benefits during any 12-month period in which the employee is eligible for these benefits.

The bill would amend Section 3303.1 of the Unemployment Insurance Code.

SB 988 – “Freelance Worker Protection Action Act”

SB 988 would require a “hiring party” (not limited to an employer) to pay an Independent Contractor (“IC”) on the date specified by the contract, or if unspecified, no later than 30 days after completion of the freelance worker’s services. The bill would prohibit requiring the freelance worker to accept less compensation than what is specified by the contract, to provide more goods or services, or to grant additional intellectual property rights as a condition of timely payment. The hiring party and IC would need to enter into a written contract that the hiring party must retain for no fewer than four years. The bill would also prohibit discrimination against an IC for asserting rights under these provisions, and creates a private right of action with injunctive relief, damages, fees, and costs available.

The bill would add Part 5 (Section 18100 et seq) to Division 7 of the Business and Professions Code.

Already Scored – Bills Signed Into Law

AB 2299 – Whistleblower Protections Posting

AB 2299 requires the Labor Commissioner to develop, and an employer to post, a model list of employees’ rights and responsibilities under the State’s whistleblower laws. An employer is considered compliant with the posting requirement set forth in Labor Code section 1102.8 if the employer posts the model list.

Governor Newsom signed the bill into law July 15, 2024, and it is effective January 1, 2025.

The bill amends Section 1102.8 and adds Section 98.11 to the Labor Code.

AB 2288 and SB 92 – PAGA Compromise

We previously detailed the sweeping PAGA reforms effectuated by AB 2288 and SB 92, which were signed into law on June 21, 2024 and are retroactively effective as of June 19, 2024.

The bills amend Sections 2699 and 2699.5 of the Labor Code, and amends, repeals and adds Section 2699.3 of the Labor Code.

AB 2049 – Summary Judgment Filing Deadlines

AB 2049, signed into law on July 15, 2024 and effective January 1, 2025, changes the deadline for a party to file a motion for summary judgment or summary adjudication from the current 75 days to at least 81 days before the hearing on the motion. The deadlines for filing an opposition are likewise extended from 14 days to at least 20 days before the hearing, and for filing a reply from 5 days to at least 11 days before the hearing. The new law prohibits a party from filing more than one motion for summary judgment against an adverse party (multiple motions for summary adjudication are excluded from this prohibition) without leave of court, and expressly prohibits the introduction of new facts or separate statement in a reply to an opposition to a motion for summary judgment that was not presented in the motion or opposition. 

This bill amends Section 437c of the Code of Civil Procedure.

Better Luck Next Game – Bills That Did Not Make the Cut

SB 1116 – Benefits for Striking Workers: After 2 weeks of an employee’s absence due to a trade dispute or strike, the employee would have been eligible for unemployment benefits under the Unemployment Insurance Code.

AB 2494 – Employer Notification: Would have required all employers, public and private, to provide employees with a written notice of coverage under COBRA, in-person and via email, following termination or reduction in hours.

AB 2930 – AI & Automated Decision Systems: Would have regulated the use of automated decision tools in employment pay, promotion, hiring, termination, or task allocation for purposes of determining employment terms or conditions. 

Workplace Solutions

We’re checking the Governor’s actions as thoroughly as our fantasy football teams’ stats, and will continue to keep you apprised of developments through the September 30, 2024 bill signing deadline. Stay tuned for our end of session blog and sign up for our October 2, 2024, webinar in which we’ll explore the roster of new laws. Please check back in with us here at Cal Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates.

Edited by Cathy Feldman and Elizabeth Levy

Seyfarth Synopsis: On July 24, 2024, Cal/OSHA’s indoor heat rule was approved by the Office of Administrative Law (OAL) and filed with the Secretary of State (SOS), rendering the rule effective immediately.

If you’ve been following our postings, you know that last month the Cal/OSHA Standards Board voted to approve Cal/OSHA’s indoor heat rule. Before a rule can become effective, it has to be approved by the OAL and filed with the SOS, a process which usually takes quite a while. It was known that the Standards Board requested OAL to expedite its review, but the regulated community was unprepared for OAL to be as expeditious as it was. On July 24, OAL approved the rule and promptly filed it with the SOS, upon which the rule was made effective. Cal/OSHA has not indicated that it will be giving employers any “grace period” to comply. For details on the requirements on the new rule, please refer to our earlier blog post: https://www.calpeculiarities.com/2024/06/25/too-hot-cal-osha-standards-board-approves-indoor-heat-illness-rule/#more-6646

Seyfarth Synopsis: PAGA reform was officially introduced in the state Assembly and Senate! The language of the bills were released detailing the most substantive changes to PAGA in its 20-year history, and Governor Newsom signed them into law on July 1, 2024. The bills have numerous provisions that benefit California employers, including imposing more restrictive standing requirements for plaintiffs, codifying the need for manageability of PAGA claims, and reforming the penalty structure, along with several other changes detailed below.

On the evening of June 21, 2024, Assembly Bill 2288 and Senate Bill 92 were introduced, collectively proposing significant reforms to the Labor Code Private Attorneys General Act of 2004. Governor Newsom signed these bills into law on July 1, 2024. We look at each of the key changes below:

Standing Required

  • Personal Experience: Plaintiffs will now need to personally experience the Labor Code violation(s) they are seeking to recover on a representative basis. Following the decision in Huff v. Securitas Security USA Services, Inc., employee-plaintiffs could pursue penalties affecting other employees, even if not personally affected by the violations affecting other employees—the plaintiff just needed to prove a single Labor Code violation to sue on any other Labor Code violation. This meant that plaintiffs had a very low burden in order to essentially unlock a wholesale audit of an employer’s wage and hour practices having nothing to do with them personally. But, under the new bills, plaintiffs must prove that they experienced the same Labor Code violations they seek to pursue on behalf of other employees.
    • Note: PAGA actions brought by nonprofit legal aid associations that have been involved in PAGA litigation for at least 5 years are exempt from this new provision. Accordingly, the Huff concept of standing in PAGA actions will remain in actions brought by nonprofits.
  • Statute of Limitations: Since Johnson v. Maxim Healthcare Services, Inc., plaintiffs have argued that there is no time limit on when they could have experienced a Labor Code violation in order to bring a PAGA claim. AB 2288 makes clear that the PAGA statute of limitations applies to the personal Labor Code violation that a plaintiff must experience—one year—to have standing to bring the PAGA action.

These provisions will go a long way in limiting the scope of broad PAGA actions from the outset. Employers can argue that the plaintiff’s claims should be adjudicated first in order to determine the appropriate scope of the claims for the representative group. It also makes the arbitrations of individual PAGA claims more important, as the results of arbitration will define the scope of the potential representative action once the representative PAGA action proceeds in Superior Court.

Manageability Officially Set

One of the more recent battles in PAGA litigation has been manageability (or lack thereof) of PAGA claims. This culminated with the California Supreme Court’s decision in Estrada v. Royalty Carpet Mills, Inc., which held that trial courts do not have the inherent authority to strike a PAGA claim on manageability grounds, but a trial court can, and should, use its full tool box of case management procedures to ensure that a PAGA claim is effectively and manageably tried.

AB 2288 explicitly enforces the courts’ power to determine manageability over PAGA claims, and provides that it may limit the evidence to be presented at trial or otherwise limit the scope of any claim filed to ensure that the claim can be effectively tried.

Changes To Structure Of Civil Penalties

AB 2288 makes several changes to the structure of penalties available under PAGA. As a reminder, under current Labor Code section 2699, employers may be subject to a civil penalty of $100 for each aggrieved employee per pay period for an initial violation, and $200 for each subsequent violation. The new penalty structure is more complex:

  1. 15% Cap on Penalties For Employers Who Take Reasonable Steps For Compliance: If an employer demonstrates that it “has taken all reasonable steps to be in compliance” with the law prior to receipt of a PAGA notice or a request for personnel records, then the available penalties are capped at 15% of the penalties sought.
    • Examples of such reasonable steps include, but are explicitly not limited to, conducting periodic payroll audits, and taking action in response to the results of the audit, disseminating lawful written policies, training supervisors on applicable Labor Code and wage order compliance, or taking appropriate corrective action with regard to supervisors as needed.
    • Whether the 15% cap is applied will be left to the discretion of the court as to whether the employer took reasonable steps to achieve compliance.
  2. 30% Cap on Penalties For Employers Who Take Steps For Compliance After Receipt Of PAGA Notice: AB 2288 provides that if an employer “has taken all reasonable steps to prospectively be in compliance with all provisions identified in the notice,” then the available penalties are capped at 30%. Like the application of the 15% cap, this is a test to be applied by the Court considering the totality of the circumstances.
  3. Cap On Penalties For Wage Statement Violations That Do Not Cause Injury:  Huge penalties for innocuous wage statement violations was a posterchild for the PAGA ballot initiative. The bill provides that if a wage statement violation under Labor Code § 226 does not cause harm to the plaintiff, then the available penalty is capped at $25. Additionally, AB 2288 confirms that penalties for Labor Code § 226 violations are the only penalties available for wage statement violations, foreclosing arguments by plaintiffs that they can double-dip on wage statement claims and seek penalties under Labor Code § 226.3 as well.
  4. Limitations On When $200 Penalty Available: Since PAGA’s inception, there had been plenty of disagreement as to when the $200 penalty for a “subsequent violation” could be awarded. Now, AB 2288 sets forth two circumstances in which that higher penalty may be considered:
    • A $200 penalty for a subsequent violation is available if there has been a court or agency determination within the last five years that the employer had an unlawful policy or practice that caused the violation; or
    • If a court determines that the employer’s conduct which caused the violation was malicious, fraudulent, or oppressive. (This is the same standard for imposition of punitive damages in California.)
    • Ultimately, the bill does not create any increased or higher penalties under PAGA than which previously existed. And, the threshold to attain the higher $200 penalty is more precisely defined and ultimately harder for plaintiffs to attain.
  5. No Derivative Penalties: Another cause of the large possible exposure to employers under PAGA was the penalties for derivative Labor Code violations—meaning plaintiffs would seek a penalty for underpayment of wages, and also penalties for derivative violations of other Labor Code provisions such as § 203 (failure to pay the underpayment at time of termination), § 204 (failure to pay the underpayment in the pay period it was earned), § 226 (failure to list the underpayment on the wage statement for the pay period), etc. As a result, a single violation could result in numerous penalties. The bill makes clear that penalties cannot be awarded for derivative claims.
  6. Cap On Penalties For Isolated Errors: Where violations occur for less than 30 days, or four consecutive pay periods, the maximum penalty available is $50.
  7. Court’s Discretion To Assess Penalties Is Codified: It has long been accepted that the Court has discretion, based on the facts and circumstances of the case, to reduce the penalties to be imposed on employers to avoid an award that is unfair under the circumstances. The Court’s discretion to adjust the amount of penalties awarded based on the circumstances of the case has been codified in the bill.
  8. Employers With Weekly Pay Periods Get Relief: PAGA imposes penalties on a pay period basis. This meant that if an employer operated on a weekly pay period, they were exposed to twice as many potential penalties than if they operated on a biweekly pay period. The bill addresses this unfairness and provides that any penalty amount for an employer operating on a weekly pay period is reduced by half.
  9. Employees Receive Greater Portion of Penalties Awarded: Previously, any award under PAGA was distributed 75% to the Labor & Workforce Development Agency and 25% to the affected employees. The bill increases the employees’ share of penalties to 35%.

New Cure Provisions

PAGA previously had an extremely limited “cure” provision which allowed employers to cure or fix the alleged Labor Code violations included in a plaintiff’s PAGA notice. This mechanism was seldom used by employers, as any attempt to cure was typically ignored by plaintiffs, and the PAGA claims would still proceed in Court. The new bills overhaul PAGA’s cure provision, allowing more violations to be cured, and introduce new mechanisms that employers can take advantage of to capitalize on curing violations.

  • What Can Be Cured? SB 92 now allows violations of Labor Code § 226 (wage statements – previously, only certain parts of wage statement violations could be cured), § 226.7 (failure to pay meal/rest period premiums), § 510 (overtime), and § 2802 (expense reimbursement) to be cured. This expansion includes some of the most frequently alleged violations under PAGA.
  • Options for Small Employers Wanting To Cure: Small employers (defined as under 100 employees during the relevant period), can notify the LWDA that they would like to cure the alleged violations. The agency will then arrange a settlement conference with the plaintiff and employer in an attempt to reach an early resolution for the matter, like the conferences held by the Labor Commissioner for individual wage claims.
  • Options for Large Employers Wanting To Cure: Employers with more than 100 employees may file a request for a stay and Early Neutral Evaluation with the court, which requires the court stay all discovery and responsive pleading deadlines. The neutral will then review the employer’s plan for curing violations, monitor compliance with the plan for a cure, and consider the employer’s efforts in limiting potential penalties. An employer may also file a motion for the court to approve a cure, even if the plaintiffs or neutral do not agree a cure has been sufficient.

While it remains to be seen how the courts will handle these new requests for Early Neutral Evaluations, it will likely put an onus on plaintiffs to provide more than boilerplate allegations in their PAGA notices. Employers should be given sufficient notice to be afforded the opportunity to cure and the Early Neutral Evaluations (and their associated stays) will provide an early opportunity for employers to highlight any vague or conclusory allegations in plaintiff’s PAGA notices, and force unreasonable plaintiffs to an early bargaining table.

Injunctive Relief Is Now A Potential Remedy

Previously, the only available remedies under PAGA were civil penalties and attorneys’ fees. The bills add injunctive relief as an available remedy. This permits PAGA plaintiffs to seek injunctive relief in any circumstances where the LWDA could seek injunctive relief.

The legislation specifies that it is effective as of June 19, 2024, even though it was not signed until after that date, and applies to any proceedings (or LWDA notices) initiated on or after that date.

Workplace Solutions

Stay tuned as your favorite Seyfarth attorneys monitor the outcomes from this groundbreaking legislation and the subsequent methods for dealing with defending PAGA suits following its passing.

Edited by Coby Turner

Seyfarth Synopsis: On June 20, 2024, the first day of summer, the Cal/OSHA Standards Board turned the heat up on employers and unanimously voted to approve Cal/OSHA’s indoor heat rule. Employers should be prepared to comply with the rule as early as August 1, 2024.  

After years of delay, the Cal/OSHA Standards Board unanimously adopted Cal/OSHA’s indoor heat illness prevention rule. Not wanting to be left in the dust, on June 21, Cal/OSHA published various guidance documents, including a model written program and FAQs on the new requirements, for California employers to rapidly come into compliance.

It’s Getting Hot In Here For Almost All California Workplaces

The new rule applies to most indoor work areas in California when the indoor temperature equals or exceeds 82°F when workers are present. It does not apply to:

  • Prisons, local detention facilities, and juvenile facilities;
  • Places of employment where workers are teleworking that are not under the employer’s control;
  • Emergency operations directly involved in the protection of life or property; or
  • Incidental heat exposures where a worker is exposed to temperatures at or above 82°F and below 95°F for less than 15 minutes in any 60-minute period (but this exception does not apply to vehicles without effective and functioning air conditioning, or shipping or intermodal containers during loading, unloading, or related work)

Controls Needed When The Heat Is On

Additionally, employers must implement engineering and administrative controls when one of the following conditions exists:

  • The temperature or heat index indoors is at least 87°F when workers are present;
  • Workers wear clothing that restricts heat removal and the temperature is at least 82°F; or
  • Workers work in a high radiant heat area and the temperature is at least 82°F.

In these higher-heat conditions, employers must take steps to reduce the temperature and heat index to below 87°F (or temperature to below 82°F for employees working in clothes that restrict heat removal or high radiant heat areas).  Engineering controls should be the first step, including cooling fans or air conditioning, increasing natural ventilation, and cooled benches. Administrative controls are a second line of defense, such as modifying work schedules and requiring mandatory rest breaks.

Access to Water and Cool Down Areas When Employees Are Feeling Hot, Hot, Hot

Employers must provide at least one quart of free, potable, fresh, and suitably cool drinking water to all workers in covered workplaces and working conditions per hour for the entirety of their shifts. If the full-shift quantity of drinking water is not available to workers at the start of a shift, the regulation requires written procedures for replenishing sufficient quantities of drinking water throughout the shift.

Not only must employers provide water, but they also must remind and encourage workers to drink it throughout their shifts and emphasize the importance of drinking water in training sessions.

Employers must also provide and maintain at least one cool down area at all times when workers are present. A cool down area must satisfy certain safety requirements, be blocked from direct sunlight, be shielded from high-radiant heat sources, and either be open to the air or have ventilation or cooling. These areas must be large enough to accommodate all workers on recovery, rest, or meal periods, and allow workers to sit in a normal posture without having to touch other workers.

It Feels Like Summertime, But How Hot Is It?

Under the new regulation, employers must measure the temperature and heat index, and record whichever is greater when the temperature or heat index reaches 87°F (or temperature reaches 82°F for employees working in clothing that restricts heat removal or high radiant heat areas).

Temperature must be measured in the immediate area where workers are located using a thermometer that is exposed to the air but shielded from radiant heat sources (the sun, hot surfaces, hot liquids, and fire).

Heat index, on the other hand, can be determined in two ways:

  1. Use a heat index monitor that measures both temperature and relative humidity and utilizes National Weather Service heat index equations to determine the heat index.
  2. Calculate the heat index by measuring the indoor temperature with a thermometer and relative humidity with a hygrometer, then use the chart found in Appendix A of the new regulation, Title 8, section 3396.

Hot Town, Summer in the City (or Not) – Employers Must Observe New Workers

Acclimatization is another key to compliance with the new rule, i.e. the process by which the body adjusts to increased heat exposure. Acclimatization is typically achieved within 4 to 14 days of regular work involving at least 2 hours per day in the heat. For the first 14 days of an assignment a supervisor or designated worker must closely observe workers who have been newly assigned to any of the following:

  • A work area where the temperature or heat index, whichever is greater, reaches at least 87°F;
  • A work area where the temperature or heat index, whichever is greater, reaches at least 82°F where workers wear clothing that restricts heat removal; or
  • A high-radiant-heat area where the temperature reaches at least 82°F.

Additional requirements will apply during a heat wave (i.e., any day when the predicted outdoor temperature will be at least 80°F and at least 10°F greater than the average high daily outdoor temperature for the five preceding days) where no effective engineering controls are in use to control the effect of outdoor heat on indoor temperature.

Implementing Emergency Response Procedures for Employees Feeling the Heat (Wave)

To mitigate the risk of harm to employees from heat-related exposure, the new rule, and its corresponding guidance requires employers to have effective emergency response protocols that:

  • Ensure that supervisors and workers are trained to recognize the signs and symptoms of heat illness;
  • Provide basic first aid (such as cooling towels and shade);
  • Obtain emergency medical services; and
  • Not allow a worker with signs or symptoms of heat illness to be left alone or sent home without being offered onsite first aid or provided with emergency medical services.

Employers must be prepared to transport workers safely to a place where they can be reached by an emergency medical provider when necessary. The goal is to stop the rapid progression to more serious illness.

Put It in Writing Before The Heat Of The Moment

As many California employers are already aware, Cal/OSHA is keen on requiring its safety plans to be memorialized in writing. Not surprisingly, the new indoor heat rule requires employers to have a written heat illness prevention plan that includes procedures for:

  • Providing sufficient water;
  • Providing access to cool down areas;
  • Measuring the temperature and heat index and recording whichever is greater;
  • Identifying and evaluating environmental risk factors for heat illness, and implementing control measures;
  • Emergency response protocols; and
  • Acclimatization.

Cal/OSHA has already published a model written plan that employers can use as a starting point. However, Cal/OSHA cautions that a heat illness prevention plan must be specific and customized to an employer’s operations to satisfy the standard.  Employers must also train workers and supervisors so they understand and can implement the employer’s plan.

What’s Next on These Summer Nights?

While for some, its summertime and the living’s easy, the Office of Administrative Law (OAL) has 30 days to review the indoor heat rule for compliance with the California Administrative Procedure Act and integrate it into the administrative rules. The Standards Board informally requested the OAL to expedite finalization of the regulation. The Cal/OSHA Deputy Chief noted that he will request immediate enactment of the regulation upon OAL approval, though immediate enactment is not guaranteed.

If the OAL approves the rule but does not make it effective immediately, employers can expect an effective date of October 1, 2024. If the OAL makes it effective immediately, employers can expect an effective date as early as August 1, 2024.  

Workplace Solutions

Employers should prepare to comply with the indoor heat rule in the next 30-60 days. But don’t sweat it, the authors, your favorite Seyfarth attorney, or any member of the Workplace Safety and Health (OSHA/MSHA) Team are here to advise on compliance with these new requirements.

Edited by Cathy Feldman, Coby Turner & Elizabeth Levy

Seyfarth Synopsis: Are you ready for it? The record-smashing icon, Taylor Swift, may have taken her tour to Europe, but that doesn’t stop new laws from cropping up back home. The Los Angeles County Board of Supervisors passed the Fair Work Week Ordinance on April 9, 2024, which is set to go into effect on July 1, 2025, for retail employers located in the unincorporated areas of Los Angeles County. But we’ve seen this remix: it closely tracks the City of Los Angeles’ Fair Work Week Ordinance.

Long Story Short

Fair Work Week Ordinances have cropped up in almost as many locations as Taylor Swift’s Eras tour, including Oregon, Chicago, New York City, Philadelphia, Seattle, and several California cities such as Berkeley, San Francisco, Emeryville, and Los Angeles. The Los Angeles County Fair Work Week Ordinance will be the first county-wide ordinance in California.

The Who’s Who of Who Is Covered

I think we’ve seen this film before. The “Retail Employers” definition in the Ordinance mirrors the definition in the LA City Fair Work Week Ordinance, which encompasses entities identified as retail businesses in the North American Industry Classification System (NAICS)’s retail trade categories, and subcategories 44 through 45, that employ at least 300 employees worldwide. Individuals employed by staffing agencies and certain subsidiaries and franchises count toward the 300-employee threshold.

Under the Ordinance, “Retail Employees” includes individuals who:

  • Perform at least two hours of work within the unincorporated areas of Los Angeles County,
  • Qualify for minimum wage under California law, and
  • Are assigned a primary work location and duties that support retail operations (like retail stores or warehouses).

Don’t Make Employees Wait And Wonder If You’re Ever Coming Around

This Ordinance will require covered employers to provide estimates and advance notice of work schedules.

  • Good Faith Scheduling Estimate. To avoid bad blood, employers must provide a good faith estimate of work schedules to prospective employees before hire (and include a Notice of Retail Employee’s Workweek Rights), and to current employees within 10 calendar days of a request.
  • Advance Notice. Covered employees must receive their work schedule a fortnight, or 14 calendar days in advance of the work period, and they have a right to decline any hours not included in it. If an employer changes the work schedule after the 14-day period, it must have documented consent from impacted employees.
  • Right To Speak Now About Schedule Changes. The Ordinance codifies employees’ right to request preferred hours, times, or locations of work. Employers are not obligated to grant these requests, but must accept or deny the requests in writing.

Predictability Pay We Know All Too Well

Just like the LA City Fair Work Week Ordinance, employees will be entitled to “predictability pay” for changes made to their work schedule within the notice period under certain circumstances. Employers will owe one hour of compensation at the regular rate of pay for any change to a scheduled date, time, or location that results in no loss of hours or results in adding more than 15 minutes of work.

Both the Ordinance and the LA City corollary require employers to pay half an employee’s regular rate of pay when an employer changes the start or end time of a shift resulting in a loss of more than 15 minutes.  However, the Ordinance requires payment of this amount under several additional circumstances, including when (1) time is subtracted from a shift before or after the employee reports to work; (2) the employer changes the date of a shift; (3) the employer cancels a shift; or (4) the employer schedules the employee for an on-call shift if the employee is not called in.

The exceptions to predictability pay are the same under this Ordinance and the LA City Ordinance:

  1. Employee-initiated schedule changes;
  2. Employees who accept a schedule change due to another employee’s absence;
  3. Changes due for violating any law or policies;
  4. Work operations are compromised pursuant to law; or
  5. When employees accept additional hours or work extra hours that require payment of overtime.

Employers Must Stay Stay Stay With Current Employees

Employers must offer additional hours to current qualified employees at least 72 hours before hiring a new employee, contractor, or temporary hire (unless doing so would require the employer to pay overtime fees).

Blank Space Between Shifts

The Ordinance matches the LA City prohibition of employers scheduling employees to work shifts that start less than ten hours from an employee’s last shift without written consent and payment of time and a half for each hour of that subsequent shift.

Who Uses Typewriters, Anyway? – Posting and Notice Requirements

Employers must post the required Notice in a conspicuous place in English, Spanish, and any other language spoken by at least 10% of the employees at a workplace.

Employers must also maintain current and former employees’ records (including work schedules, copies of written offers to employers for additional work hours, and good faith estimate work schedules) for three years.

Penalties If You Do Something Bad

Employers who violate the Ordinance could be subject to penalties up to $500 per violation (and up to $1,000 for retaliating against an employee who complains of violations) payable to the employee. Unlike the LA City Ordinance, violations of this Ordinance do not accrue daily penalties. However, employers could be subject to daily administrative penalties up to $20,000 annually per violation per employee—with the exception of a retaliation violation, which has a maximum annual penalty and fine of $30,000 per employee.

Workplace Solutions

Retail employers in the unincorporated areas of Los Angeles County should closely examine their scheduling practices and record retention procedures to confirm they are ready to comply with this new law by July 2025. Covered employers should also ensure their payroll departments are ready to handle predictability pay. Unlike Taylor Swift, you don’t have to do it with a broken heart. If you have questions regarding compliance, please reach out to the authors or your favorite Seyfarth attorney.

Edited by Cathy Feldman and Coby Turner

Update: On May 31, 2024, Governor Newsom passed S.B. 828, which delays implementation of S.B. 525, the health care minimum wage law signed by Governor Newsom on October 13, 2023. S.B. 828 delays all of the minimum wage adjustments in S.B. 525 by one month. This means that S.B. 525, which was set to take effect on June 1, 2024, will instead take effect on July 1, 2024. It further means that the minimum wage increases scheduled to take place after 2024 will take place on July 1, rather than June 1, of each year.

Seyfarth Synopsis: On September 14, 2023, the California legislature passed S.B. 525, which will raise minimum wages for health care workers across the state. The bill includes five separate minimum wage schedules for covered health care employees depending on the nature, size, and structure of the employer’s business. Unless Governor Newsom vetoes the bill (which is not expected), the bill will take effect on June 1, 2024.

Grey’s Anatomy might be set in Seattle, but now it’s all eyes on California’s health care workers. Starting June 1, 2024, S.B. 525 will raise minimum wages for health care workers across the state to a minimum of $18 per hour, or up to $23 per hour, depending on the applicable wage schedule, and based on the nature, size, and structure of an employer’s operations.

From Grey Sloan Memorial Hospital To The Denny Duquette Clinic – Most Health Care Employers Are Covered

The bill’s provisions will apply to “Covered Health Care Employers,” as that term is defined under the soon-to-be newly added Labor Code sections 1182.14 and 1182.15, including:  

  • Hospitals: licensed general acute care hospitals, licensed acute psychiatric hospitals, and other special hospitals.
  • Clinics: specialty care clinics, dialysis clinics, community clinics, psychology clinics, government run clinics, rural health clinics, and urgent care clinics.
  • Psychiatric and Mental Health Facilities: mental health rehabilitation centers, county mental health facilities, and psychiatric health facilities.
  • Licensed Skilled Nursing Facilities: including those that are owned, operated, or controlled by a hospital or integrated health care delivery system or health care system.
  • Home Health Care: including licensed home health agencies and a patient’s home when health care services are delivered by an entity owned or operated by a general acute care hospital or acute psychiatric hospital.
  • Licensed Residential Care Facilities for the Elderly
  • Integrated Health Care Delivery System Work Sites
  • Ambulatory Surgical Centers Certified for Medicare Participation
  • Physician Groups
  • County Correctional Facilities Providing Health Care Services

The term “Covered Health Care Employers” expressly excludes: (1) hospitals owned, controlled, or operated by the State Department of State Hospitals; (2) tribal clinics exempt from licensure; and (3) outpatient settings conducted, maintained, or operated by a federally recognized Indian tribe, tribal organization, or urban Indian organization.

The Scrub Nurse, The Chief, And More Are Included

The term “covered health care employee” is also defined broadly under both the new Labor Code section 1182.14 and section 1182.15 to include employees who provide patient care, health care services, or services supporting the provision of health care. Examples span from nurses and physicians to clerical workers, gift shop workers, janitors, schedulers, and billing personnel.

Contracted and subcontracted employees are also included if they:

  1. Perform contracted or subcontracted work primarily on the premises of a health care facility to provide health care services or services supporting the provision of health care;
  2. Are employed by an employer that contracts with the health care facility employer, or with a contractor or subcontractor to the health care facility employer, to provide health care services, or services supporting the provision of health care; or
  3. Perform work for a health care facility employer that directly or indirectly, or through an agent or any other person, exercises control over the employee’s wages, hours or working conditions.

Covered Health Care Employees will be able to enforce their rights under this new law through civil action, in the same manner they can currently enforce other minimum wage requirements.

The Anatomy Of Employers’ Minimum Wage Obligations

The bill includes five separate minimum wage schedules, but the minimum wage rates set forth under two of these schedules are identical. Thus, Covered Health Care Employers will fall within one of the four following groups:

1. Group 1: Covered health care facilities with 10,000 or more full-time equivalent employees, covered health care facility employers that are part of an integrated health care delivery system or health care system with 10,000 or more full-time equivalent employees, covered dialysis clinics, and covered health facilities that are owned, affiliated, or operated by a county with a population of more than 5,000,000 as of January 1, 2023.

  • June 1, 2024 to May 31, 2025: $23 per hour.
  • June 1, 2025 to May 31, 2026: $24 per hour.
  • June 1, 2026 to August 1, 2027: $25 per hour.

2. Group 2: Covered hospitals with high populations of Medicare/Medicaid patients, covered rural independent health care facilities, and covered health care facilities that are owned, affiliated or operated by a county with a population of less than 250,000 as of January 1, 2023.

  • June 1, 2024 to May 31, 2033: $18 per hour with 3.5 percent increases annually.
  • June 1, 2033 to August 1, 2034: $25 per hour.

3. Group 3: Covered primary care community or free clinics that are open for limited services of no more than 40 hours a week and that are not conducted or maintained by a government entity, covered community clinics along with any associated intermittent clinics exempt from licensure, covered rural health clinics, and covered urgent care clinics that are owned by or affiliated with a community clinic.

  • June 1, 2024 to May 31, 2026: $21 per hour.
  • June 1, 2026 to May 31, 2027: $22 per hour.
  • June 1, 2027 to August 1, 2028: $25 per hour.

4. Group 4: all other covered health care facilities

  • June 1, 2024 to May 31, 2026: $21 per hour.
  • June 1, 2026 to May 31, 2028: $23 per hour.
  • June 1, 2028 to August 1, 2029: $25 per hour.

Following these minimum wage increases, the Director of Finance will calculate an adjusted minimum wage on or before August 1 of the following year, and on or before each August 1 thereafter – seemingly in perpetuity. The calculation will increase the minimum wage by 3.5% or the rate of change in the averages for the U.S. Consumer Price Index for Urban Wage Earners and Clerical Workers, whichever is lower.

Even The New Residents Might Be Entitled To A Salary Increase

Notably, the minimum wage requirements summarized above will impact a Covered Health Care Employer’s exempt California employees as well, to the extent those employees qualify as Covered Health Care Employees. These employees will have to earn a monthly salary equivalent to no less than: (1) 150% of the applicable health care worker minimum wage or (2) 200% of the State’s generally-applicable minimum wage—whichever is greater—for full-time employment in order to qualify as exempt under California’s laws.

Any Other Changes Next Season?

In one small piece of consolation to employers, the new legislation provides that no city, county, city and county, including charter cities, charter counties, or charter cities and counties can enact any ordinance, regulation, or administrative action relating to wages or compensation for Covered Health Care Employees before January 1, 2034. So, at least local ordinances won’t be weighing Covered Health Care Employers down and requiring complicated and varied compliance.

Workplace Solutions

Health care employers should reach out to the authors or your favorite Seyfarth attorney for solutions and recommendations on addressing compliance with the new Labor Code sections 1182.14 and 1182.15 before June 1, 2024.

Edited by Cathy Feldman and Coby Turner

Seyfarth Synopsis: California lawmakers have introduced legislation that would give employees the right to ignore communications from their employers that are received outside the contours of their “working hours,” which must first be agreed upon, in writing.

If signed into law, AB 2751 would add a section to the Labor Code that would require employers to establish a workplace policy that would give employees the right to disconnect from employer communications during defined “nonworking hours.”

Who Gets to Unplug?

Under the newly proposed legislation, an employer may only contact a covered employee during non-working hours when there is:

(1) an emergency situation, which is defined as an “unforeseen situation that threatens an employee, customer, or the public; disrupts or shuts down operations; or causes physical or environmental damage”; or

(2) a change to a work schedule within 24 hours.

As currently drafted, the legislation would not apply to employees covered by a collective bargaining agreement. Beyond this limitation, the bill applies broadly to public and private employers and exempt and non-exempt employees. However, AB 2751 is in its infancy, and will likely undergo amendment to further clarify its scope. In fact, the first committee to analyze the bill recommended considering carving out exempt professionals and other amendments to clarify the definition of “employer,” “contact,” and “emergency.”

If You Don’t Turn Off That Computer Right Now…

Importantly, the bill does not afford a private right of action. Instead, employees could file a complaint with the California Labor Commissioner if there is a “pattern” of violations (i.e. three or more documented instances of their employer communicating with them outside of working hours). A pattern of such violations are punishable by a fine of no less than $100 (and the bill is currently silent on maximum penalties).

Is Anyone Else Changing the Channel on Workplace Communications?

While no other state has advanced comparable legislation, several countries have implemented laws similar to AB 2751, such as Belgium, Germany, France, Italy, and most recently, Australia. In 2018, New York City unsuccessfully attempted to pass a measure that would have prohibited retaliation against employees for refusing to respond to after-hours employer communications.

Supporters assert that this legislation is necessary to account for a so-called “cultural shift” in the U.S. workforce. The bill’s author, Assm. Matt Haney, defends his proposal on the grounds that the rapid rise of remote work and the use of smartphones has caused many employees to feel “tethered to the office.”

Opponents, such as the California Chamber of Commerce, believe that the bill is a step backwards for workplace flexibility. Rather than promoting the separation of work and home life, critics state that the bill will effectively subject all employees to a rigid working schedule and prohibit communication between employers and employees absent an emergency.

Workplace Solutions

Employers do not need to take any steps towards compliance yet. We will continue to keep you apprised of developments with this and other California legislation through the September 30, 2024 bill signing deadline. Our blog will provide a deep dive of the bills that ultimately pass and will affect your California workforce. Please check back in with us here at Cal Peculiarities, and you can also check out our Policy Matters podcast and newsletter for regular check-ins on California (and national) policy and legislative updates.

Edited by Cathy Feldman, Coby Turner, and Elizabeth Levy

check up Medical technology concept. Electronic medical record.

Seyfarth Synopsis: California healthcare employers are facing primetime levels of costly litigation alleging claims based on miscalculation of the regular rate of pay. Healthcare employers are often targets because non-exempt healthcare employees may be paid myriad different incentives—premiums, bonuses, differentials, on-call pay, and more—that may need to be included in the regular rate of pay, as we explain below.

The regular rate of pay in the California healthcare system is about as easy to understand as the plot twists in Grey’s Anatomy. The regular rate of pay is at its core the product of a fraction – but you want to ensure you don’t Nip/Tuck anything you shouldn’t, that the dollar numbers on the top and hours number on the bottom of the fraction for each workweek are correct, and that the resulting numbers are correctly included on wage payments.

It Starts With the Workweek

Just like under federal law, in California a “workweek” for overtime and regular rate purposes doesn’t necessarily start at the same day or time for everyone. The workweek is any seven consecutive days starting with the same calendar day each week. The workday is any consecutive 24-hour period beginning at the same time each calendar day.

For most employers, the workday and workweek are the same defined period for all non-exempt employees (like Sunday at 12 a.m. to Saturday at 11:59 p.m.). But particularly with healthcare employers, different non-exempt employee populations may have different workweeks and workdays, based on their regular work schedule. For example:

  • Night shift employees may not have a 12 a.m. workday start time like the day shift population, but instead have workday/week that begins at noon.
  • Some hospitals and residential care establishments may have an exception to normal overtime rules, where non-exempt employees are on an “8 and 80” schedule, which results in a fixed period of 14 consecutive days as the period for calculating overtime.

This means there may be several different workweeks to account for throughout a healthcare employer’s departments and operations when figuring out the regular rate of pay.

Then How Do We Figure Out the Regular Rate of Pay?

The regular rate of pay is the weighted average rate of (almost) all forms of pay for work performed by non-exempt employees in the workweek. It can also include monies earned after the fact that relate back to a workweek (such as a quarterly bonus). This means you add up all these forms of compensation associated with work or performance covering that workweek, and this total generally is divided by the total hours worked by that employee in the workweek.

So, when a non-exempt employee earns compensation in addition to the base hourly rate, the regular rate of pay will be higher than the employee’s base hourly rate. It’s this higher rate that is used to calculate the amount paid for overtime and double time premiums, California paid sick leave, meal and rest period premiums, and reporting time pay.

In a General Hospital, What Hours Count for the Regular Rate Calculation?

Some types of hours do, some don’t (and make sure to check any CBAs for exceptions to the usual rules). Here are some examples:

What’s In

  • Regular hours
  • Education hours
  • Controlled standby time

What’s Out

  • Meal and rest period premiums
  • Unworked reporting time pay hours
  • Uncontrolled standby time
  • Vacation, sick pay, PTO, etc.

And How Do We Treat Different Types of Pay for the Regular Rate?

Unfortunately this is where things can get a bit tricky. Here are some common examples of types of pay that would be in (or out) of the regular rate of pay calculation:

What’s In

  • Preceptor pay
  • Hazard pay
  • Shift differentials
  • Extra shift bonuses
  • Standby pay
  • Commissions
  • Non-discretionary bonuses
  • Attendance bonuses
  • Bonuses designed to incentivize workers to work harder or more efficiently

What’s Out

  • Overtime (the premium [e.g., the .5])
  • Premium pay for work on weekends, holidays, or other special days (if premium is at least 1.5x base rate).
  • Discretionary bonuses (spot bonuses or other unexpected bonuses)
  • Gifts not based on hours worked, production, or efficiency and that aren’t pursuant to an agreement
  • Percent of total earnings bonuses
  • Payments to profit-sharing plans or trusts
  • Contributions to employee benefit plans

Is This Prescription the Same for Flat-Sum Bonuses?

No! A flat-sum bonus is generally speaking a bonus that does not increase in rough proportion to hours worked. And, how to deal with flat-sum bonuses may be as surprising to healthcare employers operating in California as the diagnoses in House.

Instead of following federal law, in California, for regular rate purposes, flat-sum bonuses are divided by straight-time hours only (i.e. not necessarily all hours worked) to determine the addition to the regular rate. This amount is multiplied by 1.5 for each overtime hour and 2.0 for each double time hour in the applicable pay period in order to calculate the regular rate of pay adjustment.

Up To Your Scrubs in Regular Rate Calculations – Now What?

First, don’t assume that your payroll provider is getting it right. Payroll providers need specific instructions about what to include in the regular rate of pay calculations. The healthcare industry often utilizes more pay codes than the “normal” employer, so the regular rate calculation and how different categories of pay appear on the wage statement will need to be reviewed and directed by the employer.

Second, evaluate your payroll codes to make sure they are configured correctly in the underlying system, and that they show up the way you expect on a wage statement. Run test scenarios with different pay types and codes to ensure your system is operating as it should with holiday pay, shift differentials, bonuses, etc. This is technical and will take a lot of time and understanding, but it’s important.

Third, don’t be shy to ask for support. Seyfarth has a team of attorneys and analytics professionals who specialize in the healthcare industry. Whether it’s a one-off question, an audit of pay codes or the regular rate calculation and application, or defending litigation, we have a team of subject matter experts who can help.

Workplace Solutions

Figuring out the regular rate doesn’t mean your Private Practice needs to end up in court. Check out our prior healthcare webinar series for additional helpful compliance tips, and tune into our new series on wage and hour tips for healthcare employers in California for even more useful insights. And, as always, please don’t hesitate to reach out to the authors or your favorite Seyfarth attorney for help with all your regular rate questions and needs.

Edited by Cathy Feldman and Coby Turner