California continues to be “where the future happens” for employment law, and we are pleased to offer our 2023 version of Cal-Peculiarities How California Employment Law is Different. As in previous editions, this publication reflects the breadth and depth of our California employment practice and focuses entirely on the most vexing aspects of California employment law. Click here to request your copy today!

In connection with the launch of this year’s edition, please join us for Part 3 of our Cal-Pecs micro-webinar series on Wednesday, October 18, where Seyfarth California labor & employment attorneys will discuss some of the biggest changes to PAGA over the last year! Click here to register.

Wednesday, October 18, 2023
10:00 a.m. to 10:30 a.m. Pacific
11:00 a.m. to 11:30 p.m. Mountain
12:00 p.m. to 12:30 p.m. Central
1:00 p.m. to 1:30 p.m. Eastern

This micro-webinar, presented by Seyfarth attorneys Daniel Whang and Par Vafaeenia, will cover the latest PAGA developments of interest to executives, managers, in-house counsel, and human resources professionals with employees in California, including:

  • Arbitration of PAGA claims after Viking River and Adolph
  • Standing issues in PAGA cases
  • Significant developments that may be coming this coming year

Registrants for the webinar will receive presentation materials and a copy of the recording following the presentation. We look forward to seeing you at the webinar!

If you’d like to view Parts 1 & 2 of this series, please see the below links to the recordings:

Part 1: New Developments in Wage & Hour and Pay Equity & Pay Transparency

August 23, 2023 | View Recording Here

Part 2: California Leaves of Absence, Sick Leave, and Vacation Pay Developments

September 7, 2023 | View Recording Here

Seyfarth Synopsis: For employees looking to leave somewhere greener for somewhere warmer, California may now be climbing to the top of their list. On September 1, 2023, Governor Newsom signed legislation that extends California’s restrictions on non-compete agreements to contracts signed out of state, effective January 1, 2024. Specifically, SB 699 provides that any contract that is void under California law is unenforceable in the Golden State, regardless of where and when the employee signed the contract, and it created a private right of action for employees whose agreements include restrictive covenants.

Up In The Mountains, Down By The Ocean – The Far Reaching Implications Of California’s New Non-Compete Law

Under existing California law, non-compete agreements with California employees are typically void, with limited exception.

The new law goes a step further and adds section 16600.5 to the Business and Professions Code, which provides the following restrictions:

  1. Any contract that is void under Business and Professions Code section 16600 is unenforceable regardless of where and when the contract was signed, and cannot be enforced.
  2. An employer cannot enter into a contract with a prospective or current employee that includes a void provision under this chapter.
  3. An employer that enters into, or attempts to enforce a void contract commits a civil violation, and may be subject to a private action for injunctive relief or monetary damages. An employee bringing such an action may also recover reasonable attorneys’ fees and costs.

A Rebel Without A Cause…Can California Do That?

While California has long separated itself from the majority of the country in its treatment of employee non-compete agreements, the wrinkle in this new law is that it attempts to interfere with employee non-compete agreements that may be valid under another state’s law, which raises constitutional concerns under the commerce clause, full faith and credit clause, and potentially the contract clause.

For example, an employee based in Florida bound by a non-compete agreement enforceable under Florida law may be trying to outrun the bad luck tailin’ them and seek employment with a California-based company. Under the new California law, the agreement would be considered void and unenforceable under SB 699. If the employee’s former Florida employer sends a cease and desist letter to the California company saying they cannot hire the employee because of the non-compete that is enforceable in Florida, under this new law the California company can nullify the lawful Florida contract.

This new legislation puts in question whether California based employers should ask their non-California based employees to enter non-competition agreements even if they are enforceable under the laws in which the employee works or resides. In other words, the new law seeks to protect California employers and allow them to be more competitive by being able to hire out of state employees and not have them be bound by non-compete agreements in California. But then, why should those same California based employers be permitted to use non-compete agreements with out of state employees and enforce those agreements out of state? This is yet another example of the peculiarities of California.

Let’s Flip A Coin On Whether There Are More Limitations To Come

It may seem like the California legislature may sometimes be driving for a day and then taking a look at the map when it comes to some of its proposed legislation, as this session has another bill that was passed and is waiting for the Governor’s signature. AB 1076 is another bill focused on non-compete agreements. If signed by the Governor, this legislation would codify the 2008 California Supreme Court decision in Edwards v. Arthur Andersen LLP and void all employment noncompete agreements no matter how narrowly tailored.

This proposed bill also includes a notice requirement. AB 1076 would require employers to notify current and former employees in writing by February 14, 2024, that any noncompete clause or agreement they had entered into are void.

There has also been recent interest by the FTC in banning or reforming non-compete laws on a nationwide basis.

Workplace Solutions

Your business may be thinking they’re gonna get out of here if they gotta ride a Greyhound bus, but they need to keep in mind that if their workers stay in California or move here, their agreements may no longer be valid. So, employers of California workers who utilize non-compete agreements in any context should review and consider revising their employment agreements, offer letters, employee handbooks, and policies to remove any non-compete provisions that may continue to exist with their California employees, consider the implication of SB 699 and/or AB 1076 on their out of state workers, and ensure that recruiting and hiring practices take into account the new legislation. The authors and your favorite Seyfarth attorneys are always available to help employers navigate the road to compliance and will be closely following the new and proposed California legislation and any potential legal challenges.

Edited by Cathy Feldman and Coby Turner

Seyfarth Synopsis: Now that the Legislature’s September 14, 2023 deadline to pass bills to the Governor has come and gone, we are providing an overview of  which employment bills are before the Governor for consideration, including bills that impact non-compete agreements, FEHA protected categories, paid sick leave, Cal-WARN, industry-specific requirements, and more.

It’s unnatural – 2023 saw a historic number of bills introduced, many of which we previously detailed but failed to proceed past the June House of Origin deadline. And many of the more onerous bills saw significant amendments before moving from the Assembly to the Senate and vice-versa. Now that the Legislature’s September 14, 2023, deadline to pass bills to the Governor has come and gone, we look at what which bills before the Governor for consideration are top of employers’ minds, such as new limitations on non-compete agreements, new family caregiver and caste FEHA protected categories, increased paid sick leave allotment, expanded Cal-WARN application, and changes to industry-specific requirements. Read on for our summary of key employment bills that may soon become law.

Still I Can’t Let Go – Bills That Made The Cut

Non-Compete Agreements

SB 699: Unenforceable Non-Compete Agreements

As we previously reported, SB 699 will make any contract that is void under California law unenforceable regardless of where and when the employee signed the contract. Governor Newsom signed SB 699 on September 1, 2023, to be effective January 1, 2024.

This bill would add Section 16600.5 to the Business and Professions Code.

AB 1076: Void Employment Non-Compete Agreement

AB 1076 seeks to codify Edwards v. Arthur Andersen LLP (2008) 44 Cal. 4th 937, to void any non-compete clause or agreement in an employment context, no matter how narrowly tailored, with limited exception.  It would also add additional “protections” including a notification requirement for California employers, and make a violation of these provisions a violation of BPC 17200 et seq.

This bill would amend Section 16600 of Business and Professions Code and add Section 16600.1 to the Business and Professions Code.

New Proposed FEHA Protected Classes

AB 524: The Family Caregiver Anti-Discrimination Act

AB 524, would add “family caregiver” status as a protected class under the Fair Employment and Housing Act (“FEHA”). This term is defined as “a person who provides direct care to” certain family members or any “individual previously identified as a ‘designated person’ under Section 12945.2.” The bill expressly does not create any obligation upon employers to provide special accommodations.

The bill would amend Sections 12920, 12921, 12926, and 12940 of the Government Code.

SB 403: “Caste” Protected Class

SB 403 would add “caste” as a protected class under the FEHA and Unruh Act. The bill attempts to clarify existing law prohibiting caste discrimination as a type of ancestry, which is already a listed protected class, but also now defines “ancestry” as including additional markers, such as “lineal descent, heritage, parentage, caste, or any inherited social status.”  

The bill would amend Section 51 of the Civil Code and Section 12926 of the Government Code.

Both AB 524 and SB 403 incorporate the same amendments to Section 12926 of the Government Code, in case one is enacted after the other, so that the amendments to that Section by both bills can become law.

Leaves and Accommodations:

SB 616: Paid Sick Days Accrual and Use

As we previously reported, SB 616 would significantly expand the State’s existing paid sick leave mandate by increasing the annual amount of paid sick leave from three days or 24 hours to five days or 40 hours for eligible employees, and raising the accrual cap from 48 hours to 80 hours. The bill would also extend the anti-retaliation and procedural provisions in California’s sick pay law to include those covered by a valid CBA, and expressly exclude railroad carrier employers and their employees. Of note, any local ordinance provisions that contradict this bill would be preempted, which should reduce employers’ burden of juggling various differing sick pay laws.

This bill would amend Sections 245.5, 246, and 246.5 of the Labor Code.

SB 848: Leave for Reproductive Loss

Following on 2022’s mandatory (unpaid) bereavement leave, SB 848 would require employers to provide eligible employees up to 5 days of (unpaid, unless the employer has an existing policy stating otherwise) reproductive loss leave upon suffering a failed adoption or surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction. The bill would also prohibit retaliation against an individual who uses this leave or shares information about it.  

This bill would add Section 12945.6 to the Government Code.

SB 731: Notice of Remote Work as a Reasonable Accommodation

SB 731 would require an employer to provide 30 days’ written notice to an employee working remotely that the employee has the right to ask the employer to allow continued remoted work as a reasonable accommodation before requiring that employee to return to work in person. The bill provides specific language that such notice must include.

This bill would add Section 12940.2 to the Government Code.

Wage/Hour & Other Labor Code Bills:

SB 41: Airline Cabin Crew Employees Meal and Rest Breaks 

SB 41 was approved by the Governor on March 23, 2023, and went into effect the same day. As of that date, airline cabin crew employees covered by CBAs with valid meal and rest break provisions are expressly exempt by virtue of new Labor Code section 512.2 from California’s meal and rest period requirements.

This bill would add Section 512.2 to the Labor Code.

AB 1356: Mass Layoff Notifications 

AB 1356 would amend California’s Worker Adjustment and Retraining Act (Cal-WARN) to expand its application beyond industrial or commercial facilities to all places of employment that have employed 75 or more persons in the preceding 12 months, and include non-temporary employees of labor contractors. The bill would also increase the notice period for employees from 60 to 75 prior to initiating a mass layoff, and revise the definition of “mass layoff” to include employees “reporting to” to those at a covered establishment. The bill would also prohibit employers from conditioning severance payments in a mass layoff situation  on the employee assenting to a general release, waiver of claims, or non-disparagement or nondisclosure agreement, unless additional consideration for those terms is provided and clearly stated.

This bill would amend Sections 1400.5, 1401, 1402, and 1403 of the Labor Code.

SB 497: Retaliation Rebuttable Presumption 

SB 497 would create a rebuttable presumption of retaliation under Labor Code sections 98.6 and 1197.5 if an employer subjects an employee to an adverse action within 90 days of an employee engaging in the conduct described by those sections. The bill would also increase the civil penalty imposed on an employer under section 1102.5 from $10,000 generally to $10,000 per employee per violation.

This bill would amend Sections 98.6, 1102.5, and 1197.5 of the Labor Code.

AB 594: Local Enforcement: Wage Theft

AB 594 would authorize public prosecutors, including the Attorney General, a district attorney, a city attorney, a county counsel, or any other city or county prosecutor, to independently prosecute specified violations of the Labor Code that occur within their geographic jurisdictions. The bill would also provide that any individual agreement (i.e., not CBAs) that require arbitration of a dispute or limit representative actions would not effect the prosecutor or Labor Commissioner’s ability to enforce the Labor Code.

This bill would amend Sections 218 and 226.8 of, and adds Chapter 8 and repeals Section 181 of, the Labor Code.

Other Bills

AB 933: Defamation Privilege: Sexual Harassment 

AB 933 would extend the defamation privilege to expressly include an individual’s communications made without malice, regarding factual information related to incidents of sexual assault, harassment, or discrimination, experienced by that person, provided the individual had a reasonable basis to file a complaint regardless of whether filed or not. The bill would also authorize a prevailing defendant in any action for making such a privileged communication to recover their reasonable attorney’s fees and costs, treble damages, and punitive damages.

This bill would add section 47.1 to the Civil Code.

SB 428: Workplace Violence Restraining Orders: Harassment

Starting January 1, 2025, SB 428 would allow employers to  to seek restraining orders on behalf of their employees who have been harassed, or suffered unlawful violence or a credible threat of violence in the workplace or reasonably construed to be carried out in the workplace. The bill would prohibit a court from issuing such an order that would prohibit speech or activities protected by the National Labor Relations Act or provisions governing the communications of exclusive representatives of public employees.

This bill would amend, repeal, and add Section 527.8 of the Code of Civil Procedure.

SB 553: Workplace Restraining Orders and Violence Prevention Plan

SB 553 would permit a collective bargaining representative to seek workplace violence restraining orders on behalf of the union’s members, and revise Cal/OSHA to establish, implement, and maintain a workplace violence prevention plan as part of their injury and illness prevention program. A coalition of employers, including the California Chamber of Commerce oppose the measure, on the basis that this measure inappropriately applies across all industries a standard that originally intended to apply only to hospitals.

This bill would amend, repeal, and add Section 527.8 of the Code of Civil of Procedure and  amend Section 6401.7 and adds 6401.9 to the Labor Code.

SB 799:  Striking Workers’ Unemployment Benefit Eligibility 

SB 799 would make striking workers eligible for unemployment benefits after 2 weeks of leaving work due to a trade dispute (other than a lockout). The practical implications of this legislation would be quite staggering, as the whole point of a strike is to inflict pain and bargaining pressure on the understaffed employer, and without comparable pressure on the out of work striking employees, their side would certainly have more leverage. The bill would require greater draws on California’s $18 billion unemployment insurance fund deficit— perhaps resulting in higher payroll taxes.

This bill would amend Section 1262 of the Unemployment Insurance Code.

Industry-Specific Bills

SB 525: Health Care Employee Pay

SB 525 would establish a patchwork of three separate minimum wage schedules (setting minimum wages at a rising scale over time from $18-$25) for covered health care employees, depending on the nature of the employer.

This bill adds Sections 1182.14 and 1182.15 to the Labor Code.

SB 627: Chain Businesses Notice Requirements to Displaced Workers

SB 627 would require chain businesses consisting of 100 or more nation-wide establishments to provide a 60-day displacement notice prior to closing a location to employees who have worked for the employer for at least six months. For one year after the closure of a covered establishment, employers must offer workers the opportunity to remain employed by the employer and to transfer to a location of the chain within 25 miles of the establishment subject to closure as positions become available. Employers must “maintain a preferential transfer list of covered workers . . . and shall make offers of transfer to covered workers in order of greatest length of service based on the worker’s date of hire at the chain.” These requirements may be waived by a clear and unambiguous CBA waiver.

This bill would add Part 9.7 (commencing with section 2550) to Division 2 of the Labor Code.

SB 723: Right to Recall in Hospitality 

SB 723 amends Labor Code 2810.8, established via SB 93 of 2021 (which we discussed at the time of its passage), to expand certain hospitality employees’ right to recall after being laid off for a reason related to the COVID-19 pandemic. The bill extends the December 31, 2024, sunset date to December 31, 2025.

This bill would amend and repeal Section 2810.8 of the Labor Code.

AB 647 and SB 725: Successor Grocery Employers 

AB 647 and SB 725 would both place new requirements on successor grocery employers’ hiring and reinstatements when there is a “change in control,” reminiscent of legislative efforts in 2014-2015.

These bills would amend Sections 2502, 2504, and 2512 of the Labor Code and add Sections 2507, 2509, 2510, and 2517 to the Labor Code.

AB 1228 and SB 476: Fast Food-Industry Changes 

In some political jockeying, AB 1228 would repeal existing law, presently suspended due to a referendum petition, which established the Fast Food Council within the Department of Industrial Relations, only if the referendum is withdrawn by January 1, 2024. If withdrawn by that date, the bill would, until January 1, 2029, re-establish the Fast Food Council, deem the council to be a governmental agency, and re-establish its duties to include, among other things, to establish a minimum wage and requirements and review procedures for health, safety, and employment standards.

This bill would add Part 4.5.5 (commencing with section 1474) to Division 2 of the Labor Code and repeal Part 4.5.5 (commencing with section 1470) of Division 2 of the Labor Code.

SB 476 would require an employer to pay costs associated with an employee obtaining a food handler card, including the time it takes for the employee to complete the training (which would be considered “hours worked”), the cost of the food handler certification program, and the time it takes to complete the certification program. The bill would also prohibit an employer from conditioning employment on an applicant or employee having an existing food handler card.

This bill would amend Section 113948 of the Health and Safety Code.

Workplace Solutions

Why does the legislature keep playing with our mind? We will continue to keep you apprised of developments as they come out of the Governor’s office through the October 14, 2023, bill signing deadline. Expect a deep dive on our blog of bills that ultimately pass and will affect you and 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 and Coby Turner

Seyfarth Synopsis: On September 13, 2023, the California legislature passed S.B. 616, which is expected to significantly expand the State’s existing paid sick leave mandate by increasing the annual amount of paid sick leave from three days or 24 hours to five days or 40 hours for eligible employees, and raising the accrual cap from 48 hours to 80 hours. Unless Governor Newsom vetoes the bill (which is not expected), the amendment will take effect on January 1, 2024.

California was one of the first states nationally to implement a statewide paid sick leave mandate, back in 2014. Since then, the law has been amended a number of times – but what hasn’t changed (so far) is the number of hours employers were required to provide. That may all be changing soon!

Impending Changes to California’s Paid Sick Leave Law

S.B. 616 proposes several key changes to California’s existing paid sick leave law, including:

  • Increased Annual Paid Sick Time. The bill increases the annual paid sick leave usage cap from 24 hours or three days per year to 40 hours or five days per year, regardless of whether an employer opts to accrue or frontload paid sick time. This increase would align California with a number of other state paid sick leave laws, including Arizona, Connecticut, Massachusetts, Michigan, New Jersey, and Oregon.
  • Increased Rolling Accrual Cap: The bill also would increase the current California rolling accrual cap (also known as “point-in-time” accrual cap and maximum accrual cap) from 48-hours or six days to 80-hours or 10 days.
  • Increased Alternative Accrual Rate. Under the current paid sick leave law, the accrual rate is one hour for every 30 hours worked, but employers may use a different accrual method as long as the employee receives no less than 24 hours of accrued paid sick leave by their 120th calendar day of employment and in each calendar year. S.B. 616 continues to allow an alternative to the 1 for 30 accrual method, but with an added wrinkle. Specifically, in addition to ensuring that employees accrue at least 24 hours of paid sick leave by their 120th calendar day of employment, employees must also now accrue at least 40 hours of paid sick leave by their 200th calendar day of employment. For each calendar year after the first year of employment, employees would need to accrue at least 40 hours of paid sick leave per year.
  • Increased Frontloaded Grant to Avoid Accrual and Carryover.
    • New Hires. Under the current paid sick leave law, employers can avoid accrual tracking with a lump grant of at least 24 hours or three days of paid sick leave for new employees to use by their 120th calendar day of employment. S.B. 616 requires employers to provide new hires with no less than 40 hours or five days of paid sick leave that is available to use by their 200th calendar day of employment to avoid accrual of paid sick leave. It is not completely clear from the text of the bill whether the 24-hour allocation by day 120 and the 40-hour allocation by day 200 are inclusive or exclusive of each other.
    • Existing Employees. S.B. 616 does not change employees’ right to carry over accrued, unused paid sick leave at year-end. However, it increases the amount of the lump sum grant a California employer must make each year to avoid the accrual and year-end carryover requirements, from at least three days or 24 hours to at least five days or 40 hours of paid sick leave granted at the beginning of each benefit year.

Next Steps: Signature, Effective Date

As noted above, this law will go into effect unless Governor Newsom vetoes it, which is unlikely. Unless vetoed, the amendments will go into effect on January 1, 2024. Stay tuned for updates in the coming weeks as Governor Newsom has until October 14, 2023, to sign or veto bills that were passed by the state legislature.

Also, stay tuned for Seyfarth’s full legislative update coming soon!

Workplace Solutions

As the paid leave landscape continues to expand, companies should reach out to the authors or your favorite Seyfarth attorney for solutions and recommendations on addressing compliance with the California sick leave law and sick leave requirements generally. To stay up to date on paid leave developments, click here to sign up for Seyfarth’s Paid Sick Leave mailing list.

Edited by Cathy Feldman and Coby Turner

Seyfarth Synopsis: The California Supreme Court held that a plaintiff whose individual PAGA claims are compelled to arbitration retains standing to pursue representative PAGA claims in court in Adolph v. Uber Technologies, Inc., meaning that their claims may live on way past the first volley.

Wimbledon may be over but, on Monday, the California Supreme Court returned Viking River’s serve and took the match with its highly anticipated decision in Adolph v. Uber. The headline? A plaintiff whose individual PAGA claims are compelled to arbitration retains standing to pursue representative PAGA claims in court.

Game

Those following the play at home may remember the California Supreme Court’s 2014 decision in Iskanian v. CLS Transportation. Iskanian set the rules of play that PAGA claims could not be split into their individual and representative parts. It also said the right to bring a PAGA claim in court was unwaivable, using the dropshot to make otherwise enforceable arbitration agreements inapplicable to these claims. As a result, for many years California employers were forced to defend against PAGA claims in Court even where employees signed arbitration agreements with class and representative action waivers.

Set

Iskanian lasted nearly a decade as good law—a lifetime in PAGA litigation—until the U.S. Supreme Court issued last year’s decision in Viking River. As we previously blogged about, SCOTUS held that the FAA preempted California’s rule preventing courts from dividing PAGA actions. PAGA actions could be split, and an employee’s individual PAGA claims could be compelled to arbitration. Without the individual claims though, a PAGA plaintiff lacked standing to pursue the representative claims and those claims had to be dismissed.

But Justice Sotomayor noted in dissent that the majority’s foot may have been on the line when it issued its decision. She warned that California law would govern what happens to a PAGA plaintiff’s representative claims after the individual claims are compelled to arbitration and, under the right circumstances, California courts would “have the last word.”

Match

Taking Justice Sotomayor up on her invitation, the California Supreme Court held in Adolph that an order compelling a PAGA plaintiff’s individual claims to arbitration does not strip the plaintiff of standing to pursue representative claims in court. The Court relied heavily on the legislative purpose of PAGA, as well as statutory language establishing (in the Court’s view) that a worker achieves PAGA standing if they have had one Labor Code violation committed against them by their employer.

In sending Uber’s volleys back to their side of the net, the Court also resolved several other points concerning the litigation of PAGA actions, including:

  • The outcome of a PAGA plaintiff’s individual arbitration will be binding on issues of standing. If the plaintiff prevails at individual arbitration, they get to keep the representative claims and pursue them. If the plaintiff loses, they do not.
  • Sending an employee’s individual PAGA claims to arbitration does not split the underlying PAGA action into two cases. The PAGA action remains a single case that is subject to the mandatory stay provisions of applicable California statutes.

Takeaways For Those In The Stands

Although California may have taken the match, points were scored for employers.

15 – Under Adolph, employers can (and ought to) vigorously defend against individual PAGA claims in arbitration knowing that, if they prevail, the plaintiff will be unable to proceed with their representative PAGA claims. Going to individual arbitration first should allow employers the chance to defeat an individual PAGA plaintiff’s claim without facing the burden and expense of responding to overbroad discovery and fishing expeditions requesting information as to every non-exempt employee.

30 – Even if the individual defense in arbitration is unsuccessful, employers retain the ability to challenge a plaintiff’s representative claims on substantive and/or procedural (e.g., manageability) grounds.

40 – Because the Court specifically held that ordering an employee’s individual claims to arbitration does not sever a PAGA action, trial courts should apply a mandatory stay to the representative PAGA claims pending the outcome of individual arbitration, potentially tying up any kind of representative litigation for an extended period of time.

The winner of the game thus remains undetermined.

Workplace Solutions

The fight over PAGA claims is far from over, and the next tournament is right around the corner. Other important decisions are still pending from the California Supreme Court and talk of proposed ballot measures that would make wholesale changes to the PAGA framework. Employers wanting to stay up to date on the latest should be in touch with their Seyfarth attorney to ensure they do not miss any important updates in this developing area of the law.

Edited by Coby Turner

Seyfarth Synopsis: On June 20, 2023, the California Department of Public Health (CDPH) updated its guidance to local health departments on the definition of a COVID-19 outbreak. The new definition changes the timeframe for counting COVID-19 cases that make up an outbreak from 14 to 7 days. The CDPH change necessitates that the definition of an outbreak for purposes of Cal/OSHA’s non-emergency COVID-19 standard also changes. Now, an employer need only implement the more stringent outbreak provisions of the COVID-19 standard if there have been at least three COVID-19 cases within an exposed group during a 7 day period.

At this stage in the COVID-19 pandemic, and under the more relaxed Cal/OSHA COVID-19 non-emergency standard that went into effect earlier this year, most California employers have a smoothly running COVID-19 prevention program in place. But the prospect of an “outbreak” still causes dread among employers.

The outbreak provisions under the new standard require implementation of various COVID-19 mitigation protocols that are costly and challenging to administer, and that may cause extreme resistance in the employee population. In addition, the analysis of whether an “outbreak” exists, and which employees are subject to the stricter protocols (the “exposed group”—essentially people in the presence of a COVID-19 case anywhere on the premises during their infectious period), is confusing.

Since the early days of the pandemic, Cal/OSHA’s regulations have required outbreak protocols when there have been three or more COVID-19 cases within an exposed group who visited the workplace during their infectious period at any time during a 14-day period. However, the current Cal/OSHA standard was written to be automatically updated to reflect CDPH outbreak changes.

What Changed?

On June 20, 2023, the CDPH quietly updated its guidance on the definition of outbreaks in non-healthcare settings by taking the timeframe for counting COVID-19 cases in a particular exposed group down from 14 days to 7 days. This change means that the Cal/OSHA outbreak requirements now only apply when there have been three or more COVID-19 cases within an exposed group during a 7 day period. CDPH’s stated reason for the change is “based on the shortened disease incubation period with more recent SARS-CoV-2 variants.​”

The change should make it much easier for employers to avoid hitting outbreak status, and triggering the accompanying restrictions. But, employers still need to look at a 14-day period for getting out of outbreak status, i.e. Section 3205.1 applies until there are one or fewer COVID-19 cases detected in the exposed group for a 14-day period. Also, the major outbreak provisions, which require even more mitigation controls and are triggered by 20 or more employee COVID-19 cases in the exposed group within a 30-day period, remain unchanged from the 14-day counting window (they are not tied to the CDPH changes).

What Does Our Business Still Need To Do If There Is An Outbreak?

Now, if your business has 3 or more COVID-19 cases in an exposed group during their infectious period in a 7-day period, it will be in outbreak status. During an outbreak, employers must still:

  • Immediately make testing available to employees in the exposed group for the outbreak and continue to make tests available at least weekly until there are one or fewer new COVID-19 cases detected in the exposed group for a 14-day period.
  • Ensure that all employees who had close contacts and remain at work take a COVID-19 test within three to five days after the close contact, and exclude from the workplace employees who test positive for COVID-19.
  • Exclude employees who do not take a COVID-19 test within three to five days after the close contact until the return-to-work requirements for COVID-19 cases are met.
  • Perform a review of potentially relevant COVID-19 policies, procedures, and controls and implement changes as needed to prevent further spread of COVID-19 as soon as the outbreak provisions apply, and then periodically thereafter.
  • Implement ventilation changes to mechanical ventilation systems including increasing filtration efficiency to at least MERV-13, or the highest efficiency compatible with the ventilation system. Evaluate whether HEPA air filtration units are needed.
  • Require employees in the exposed group, regardless of vaccination status, to wear a face coverings when indoors, or when outdoors and less than six feet from another person, unless an exception applies.

Workplace Solutions

While many companies may have put these issues somewhat out of sight and out of mind, it is important to remember that restrictions remain as employees may be traveling and bringing illnesses back to the workplace. Outbreaks are still happening, but this change helps blunt some of the impact. Stay tuned for updated guidance and developments, and don’t hesitate to reach out to your favorite Seyfarth attorney should you have any questions.

Edited by Coby Turner

Seyfarth Synopsis: When the Legislature reconvenes from Spring Break on April 10, 2023, it will resume consideration of the employment bills that were among the 2,600 introduced.  Notable employment bills include those impacting new FEHA protected classes, leaves and accommodations, background checks, layoff and rehire rights, and more.

As one prominent Sacramento lobbyist tweeted: “More than 500 bills were introduced [on February 20], the deadline for 2023 bills, bringing the total to just over 2,600 bills between the Assembly and Senate. That figure is one of the highest in the past decade.” Like the Legislature, the Governor also has been hard at work, already signing into law a bill that, as of March 23, 2023, exempts airline cabin crew employees covered by CBAs with valid meal and rest break provisions from California’s meal and rest period requirements. Lawmakers’ top-of-mind subjects for 2023 include expanding protected classes, reasonable accommodations and leaves of absence, workweek flexibility, and mass layoffs. With the Legislature returning from Spring Break on April 10, and the deadline for bills to pass each house coming up on June 2, we take a look at the most significant labor and employment related bills on their docket for continued consideration.

Non-Discrimination

New Proposed FEHA Protected Classes: The Family Caregiver Anti-Discrimination Act, AB 524, would add family caregiver status — defined as “a person who is a contributor to the care of one or more family members”—“a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or any other individual related by blood or whose association with the employee is the equivalent of a family relationship” — as a FEHA-protected class. SB 403, introduced as a spot bill, has been amended to add caste as a protected class to various laws including the FEHA and Unruh Act. SB 461 was originally intended to expand the FEHA “religious observance” protected category to more broadly include “cultural observance” or a religious, cultural, or heritage holiday or ceremony. However, this bill has been amended to instead deal with state employees’ allotment of time off for observance of religious holidays.

Veterans: SB 73, the Voluntary Veterans’ Preference Employment Policy Act, would permit private employers to establish and maintain a written veterans’ preference employment policy that would need to be applied uniformly to hiring decisions and allow a voluntary preference for hiring a veteran over another qualified applicant. SB 855 would prohibit employers from requiring an employee who is a veteran to work on Veterans Day, subject to certain requirements, including that: (1) the employee provide advance notice of his or her intent to take the day as a holiday; (2) the employee provide proof of veteran status; and (3) absences on this date, either individually or in the aggregate, do not negatively impact public health or safety, or significantly disrupt the employer’s operations. 

Criminal Conviction History:  SB 809, the “Fair Chance Act of 2023” would make it an unlawful employment practice to: (1) take adverse action against an employee or applicant based on arrest or conviction history; and (2) end an interview, reject an application, or otherwise terminate the employment application process based on conviction history information provided by any source unless the conviction history “has a direct and adverse relationship with one or more specific duties of the job documented.” The bill would also provide a specific individualized assessment, notice, and response process that must be followed if the employer initially determines that an employee or applicant’s conviction history disqualifies them from employment or promotion.  The bill would also add elements to the required notification to be provided to the consumer; impose posting, records retention, and other requirements; and authorize employers to conduct a conviction history background check only in specified circumstances, e.g., when “[a]n individual with a particular conviction history is prohibited by federal or state law from holding the position sought,” or when the employer is required to compile such information pursuant to federal law.

Leaves and Accommodations

Paid Sick Days Accrual and Use:  No legislative year in California is complete without a paid sick leave expansion bill. SB 616 would increase mandatory paid sick leave, and an employer’s authorized limitation on the use of annual carryover sick leave, from 24 hours or 3 days each year of employment to 56 hours or 7 days. The bill would also increase sick leave accrual thresholds from 48 hours or 6 days to 112 hours or 14 days.

Paid Family Leave Expansion: Continuing the “designated person” theme from 2022 bills, AB 518 would expand eligibility for benefits under the paid family leave program to include individuals who take time off work to care for a seriously ill “designated person,” defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” The bill would authorize the employee to identify the designated person when they file a claim for benefits.

Leave for Loss Related to Reproduction or Adoption: Following on 2022’s mandatory (unpaid) bereavement leave, SB 848 would require employers to provide eligible employees up to 5 days of (unpaid, unless the employer has an existing policy stating otherwise) reproductive loss leave upon suffering a miscarriage, unsuccessful assisted reproduction, failed adoption, and other similar events. 

Reasonable Accommodation: Remote Work: SB 731 would amend FEHA to require an employer to grant the reasonable accommodation request of an employee with a qualifying disability to work remotely, provided (1) the remote work request originated prior to the onset of the pandemic; (2) the employee “performed their essential job functions remotely for at least 6 of the 24 months preceding the renewed request;” and (3) the employee’s essential job functions have not changed and are still able to be performed remotely. 

Wage/Hour/Labor Code Bills

Layoff Notifications: AB 1356 would amend California’s Worker Adjustment and Retraining Act (Cal-WARN), to expand its application beyond industrial or commercial facilities to all places of employment that have employed 75 or more persons in the preceding 12 months at all facilities located within California and to labor contractors. The bill would increase the period within which the employer must provide notice prior to ordering a mass layoff from 60 to 90 days, and revise “mass layoff” to include employees at or reporting to a covered establishment. The bill would also prohibit employers from, and subject them to penalties for, including a general release, waiver of claims, or nondisparagement or nondisclosure agreement as a condition of payment for which the employer is liable under Labor Code section 1402 unless obtained in exchange for additional and separate consideration.

Retaliation Rebuttable PresumptionSB 497 would create a rebuttable presumption of retaliation under Labor Code sections 98.6 and 1197.5 if an employer discharges, threatens with discharge, demotes, suspends, retaliates against, or otherwise subjects an employee to an adverse action within 90 days of an employee engaging in conduct protected by those sections. The bill would increase the civil penalty  imposed on an employer under section 1102.5 from $10,000 to $10,000 per employee per violation, awarded to the aggrieved employee(s), and expands the penalty to employers that are not corporations or LLCs.

Workweek Adjustments:  SB 703, the “California Workplace Flexibility Act of 2023,” would permit an individual nonexempt employee to request an employee-selected flexible work schedule providing for workdays up to 10 hours per day within a 40-hour workweek without the obligation to pay overtime compensation for those additional two hours in a workday. AB 1100 would allow employers with five or more employees to apply for grants to the DIR for the purpose of administering pilot programs that provide each employee the option to work a 32-hour workweek.

Caregiver Rest Periods: AB 1031 would exempt employers from requiring a nonexempt employee be relieved of all duties for rest periods if the employee is providing direct support to an individual with an intellectual or developmental disability in an integrated community setting, under prescribed circumstances, provided that another rest period be authorized and permitted reasonably promptly after the circumstances that led to the interruption have passed. If circumstances do not allow the employee to take a replacement rest period, the bill would require the employer to pay the employee one hour of pay at the employee’s regular rate of pay for the missed rest period.

Paid Sick Days: Health Care Employees: AB 1359 would establish new procedures governing the accrual and use of paid sick leave days for employees of a covered “health care facility,” unless covered by an existing CBA. The bill would permit accrued paid sick days to carry over to the following year of employment for those employees, subject to certain conditions, and would prohibit a covered health care facility from limiting an employee’s use of accrued paid sick days. The bill would authorize an employee to bring a civil action against employer that violates this provision.

Wage Theft: Alternative Enforcement: AB 594 would authorize public prosecutors to prosecute violations of the Labor Code independently and without direction from the DLSE, DWC, Cal-OSHA within their geographic jurisdictions, make available prevailing party attorneys’ fees, costs, and injunctive relief, and exempt these actions from any arbitration agreement between the employer and employee.

Miscellaneous Other Bills

California Worker Freedom from Employer Intimidation Act: SB 399 would prohibit an employer from requiring its employees to participate in meetings or communications whose purpose is to (very broadly) communicate the employer’s opinion about religious or political matters, or rights guaranteed by the First Amendment, with limited exceptions.

Unlawful Employee Contracts: AB 747 would add new prohibitions on contractual employment and post-employment terms, including in part (1) prohibiting employers from requiring employees, prospective employees, or former employees to pay for a debt if the individual’s employment or work relationship with a specific employer is terminated; (2) prohibiting employers from imposing penalties, fees, or costs on an employee or independent contractor for terminating the employment relationship; and (3) prohibiting employers from entering into or presenting employees or prospective employees as a term of employment or attempting to enforce any covenant not to compete that is void.

Non-Competes: AB 1076 would codify Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, which held that the statutory provision voiding noncompete contracts must be broadly construed to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored. The bill would also make it an unlawful employment practice, and unfair competition under the UCL, to even include a noncompete clause in an employment contract, or to require an employee to enter into a noncompete agreement.

Defamation Privilege: Sexual Harassment: AB 933 would extend the defamation privilege to expressly include “[a] communication made by an individual, without malice, regarding an incident of sexual assault, harassment, or discrimination.”

Workplace Violence Restraining Orders: Harassment: SB 428 would permit employers to seek restraining orders on behalf of their employees not only for violence or credible threat of violence, but also for harassment, or “a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose.” The bill would not permit a court to issue such an order if doing so would prohibit speech or activities protected by the National Labor Relations Act or provisions governing the communications of exclusive representatives of public employees.

Civil Rights Department: Labor Trafficking: AB 235 would establish a Labor Trafficking Unit within the California Rights Division (formerly Department of Fair Employment & Housing), which would receive and investigate complaints alleging labor trafficking, take steps to prevent labor trafficking, and coordinate with or refer cases to the DOJ’s Labor Enforcement Task Force or the DLSE for potential civil actions.

Statute of Limitations CCPA Claims: AB 1546 would establish that the statute of limitation for the Attorney General to file an enforcement action under the California Consumer Privacy Act of 2018 is five years. 

Industry-Specific Bills

** NEW LAW: Meal and Rest Breaks Airline Cabin Crew Employees:  SB 41 was approved by the Governor on March 23, 2023 and went into effect the same day. As of that date, airline cabin crew employees covered by CBAs with valid meal and rest break provisions are expressly exempt by virtue of new Labor Code section 512.2 from California’s meal and rest period requirements.

Licensed Manicurists AB 5 Exemption:  SB 451 would extend the licensed manicurists exemption to AB 5 to December 31, 2029.

Health Care Employee Pay:  SB 525 would increase pay to at least $25 per hour for health care employees performing any work on the premises of a covered health care facility starting January 1, 2024. The bill would require the minimum wage rate to increase annually. 

Chain Businesses Notice Requirements to Displaced Workers: SB 627 would require chain businesses consisting of 100 or more nation-wide establishments to provide a 60-day displacement notice prior to closing a location to employees who have worked for the employer for at least six months at the subject location and satisfy other requirements.  For one year after the closure of a covered establishment, employers must offers workers the opportunity to remain employed by the employer and to transfer to a location of the chain within 25 miles of the establishment subject to closure as positions become available.

Right to Recall in Hospitality: SB 723 (originally a spot bill) amends Labor Code 2810.8, established via SB 93 of 2021 (which we discussed in 2021), to expand hospitality employees’ right to recall after being laid off, removing the restriction and original purpose that it be due to COVID-19. The bill would also remove the December 31, 2024, sunset date.

Successor Grocery Employers: AB 647 and SB 725 would all place new requirements on successor grocery employers, reminiscent of legislative efforts in 2014-2015.

Fast Food-Industry Changes: AB 1228 would make fast food restaurant franchisors jointly and liable with their franchisees for the franchisees’ violations of prescribed laws, including PAGA. This proposal is back after being amended out of 2022’s FAST Act, which established the Fast Food Council, and is presently suspended due to a referendum petition. SB 476 would require an employer to pay costs associated with the employee obtaining a food handler card, including the time it takes for the employee to complete the training, the cost of the food handler certification program, and the time it takes to complete the certification program.

Workplace Solutions

We’ll keep you updated here at Cal Peculiarities as these bills move through the California Legislative process. 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 Elizabeth Levy & Cathy Feldman

Seyfarth Synopsis: After a lengthy delay due in part to the COVID-19 pandemic, Cal/OSHA has published its proposed indoor heat illness prevention standard. After the publication, there is a 45-day comment period, ending at the Standards Board May 18, 2023 meeting. The Standards Board has one year from publication date to take action on the proposed standard.

Background

For almost 20 years, Cal/OSHA has distinguished itself from Federal OSHA in several ways, including maintaining a heat illness prevention standard with respect to employees working outdoors. Cal/OSHA also cited employers for indoor heat illness hazards under its Injury and Illness Prevention Program regulations. Taking it up a notch, in 2016, SB 1167 was signed into law, which required Cal/OSHA to submit a proposal to the Standards Board for new regulations on employee protection from indoor heat hazards. Thus began Cal/OSHA’s work on an indoor heat illness prevention standard. On April 22, 2019, Cal/OSHA published what was then its latest draft standard, which we blogged about previously. However the normally slow standards-making process was virtually ground to a halt when the COVID-19 pandemic hit. Cal/OSHA’s proposed indoor heat standard has remained stagnant, until now…

What’s Required Under The Proposed Standard

The proposed indoor heat standard:

  • Applies to all indoor work areas where the temperature equals or exceeds 82 degrees Fahrenheit when employees are present.
  • Includes enhanced requirements for indoor work areas where the temperature or heat index equals or exceeds 87 degrees Fahrenheit when:
    • employees are present;
    • employees wear clothes that restrict heat removal and temperature equals or exceeds 82 degrees Fahrenheit;
    • or employees work in a high radiant heat area and the temperature equals or exceeds 82 degrees Fahrenheit.
    • One such requirement is to measure and record the temperature or heat index (which is greater) in these hot areas where employees work, and implement various controls measures to reduce the temperature or heat index or both. In lieu of measuring and recording, an employer can opt to simply assume a work area is subject the enhanced requirements.  
  • Allows compliance to be part of employer Injury Illness Prevention Programs, though employers can also choose to have a stand-alone written heat illness prevention program.
  • Requires that employees must have access to fresh, pure, suitably cool, and free water as close as practicable to working areas and in cool down areas.
  • Mandates that employers must establish and maintain one or more cool down areas at all times, and encourage preventive cool-down breaks when employees feel the need.
  • Requires employers to use control measures to minimize the risk of heat illness, such as personal heat-protective equipment, administrative controls (such as limited work time in hot areas), and engineering controls (like air conditioning).
  • Employers must have effective emergency response procedures.
  • Employers must have close monitoring of newly assigned employees and during a heat wave.
  • Employees must be trained on indoor heat illness prevention.

What’s Next

The Standards Board has one year from publication date to take action on the proposed standard. The soonest the Board could adopt the standard is likely sometime in the summer or fall of 2023, though the regulatory process typically takes longer. While a formal codified heat illness standard may be months to (possibly) years away, California employers should keep in mind that in the absence of a heat illness standard, Cal/OSHA can and does enforce indoor heat hazards under the IIPP standard, under which employers must evaluate site-specific hazards at their workplace. In addition, Section 15 of the Industrial Welfare Commission’s Wage Orders include requirements for maintaining comfortable temperatures in work areas “consistent with industry wide standards” for the nature of the work being performed.

Workplace Solutions

Employers should stay on the lookout for updates to the indoor heat prevention rulemaking process, and in the interim, employers with hot indoor work areas should review their worksite hazard analyses and ensure that any indoor heat hazards are being controlled. Seyfarth’s Workplace Safety group can assist you.

Edited by Elizabeth Levy

Seyfarth Synopsis: Every year California enacts a host of new laws that mean even the most diligent employers need to give their handbooks and policies a review and make sure they are up to date with the latest developments. Seyfarth has a few tips for making sure your handbook in the New Year stays compliant all year long (or at least until California complicates things again!).

It’s late-December, so as you make your New Year’s resolutions for 2023, updating your company’s handbook to comply with new California laws should be at the top of your list!

Although there’s no right or wrong time to do a handbook and policy update, we recommend doing them annually, as California law continually changes. Close to the start of a new year is a great time to do a check-in, because new laws typically become effective on January 1. So let’s get you rockin’ into New Year’s Eve with a game plan for your updates for 2023!

As we addressed in our legislative update this past fall in detail, here are the new laws coming into effect for 2023 (unless otherwise noted) requiring updates to employee handbooks:

Changes to CFRA, Leave, and Sick Policies to Include A “Designated Person”

The California Family Rights Act (“CFRA”) and the California Paid Sick Leave Law (“PSL”) will now cover a “designated person” for whom an employee may take leave, in addition to the family members covered within their scope under AB 1041.

As we blogged about in detail previously, a designated person under the CFRA is defined as any individual related by blood or whose association with the employee is the equivalent of a family relationship, and includes domestic partners. The definition of a designated person under the new PSL provisions is different and broader—it can be any person identified by the employee. An employee can identify their designated person at the time they request leave or request to use PSL.

Under both the CFRA and PSL revisions, an employer may limit an employee to naming one designated person per 12-month period. And, under the CFRA, an employer may require the employee substitute any of the employee’s accrued vacation leave or other accrued time off during a leave period, or any other paid or unpaid time off negotiated with the employer.

Employers should make sure their leave policies, sick time policies, associated leave request forms, and handbooks are updated accordingly.

Bereavement Leave Policy Updates

Starting in 2023, the CFRA requires an employer to allow employees to take up to 5 days of bereavement leave upon the death of a family member, provided the employee has at least 30 days of active service. Family member is defined as spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law—more narrowly than the definitions used for CFRA leave generally or PSL, as noted above.

The days of bereavement leave do not be taken consecutively, but an employer can require that the leave be completed within three months of the death of the family member. If the employer does not have a paid bereavement policy, the leave may be unpaid, except that an employee must be allowed to use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee. The law does not have any limit on how many times it may be utilized in one year, in the event the employee has multiple covered family members pass away.

The law allows the employer to require documentation of the death of the family member, which can be a death certificate or a published obituary (among other broad types of verification), and prohibits retaliation for requesting bereavement leave.

Employers should revise their bereavement leave policies (if they have written policies) and handbooks to comply with these changes, especially to ensure they are offering at least the minimum number of required days.

Changes to Attendance and Mobile Device Use Policies Where There Are Emergency Conditions

Under SB 1044, in the event of an emergency condition, employers may not take or threaten adverse action against an employee for refusing to report or leaving a workplace because they feel unsafe. In addition, an employee may not be prevented from using their mobile devices for emergency purposes.

It’s important to note that a health pandemic is not considered an “emergency condition,” under this new law. It does include: (1) conditions of disaster or extreme peril to the safety of persons or property at the workplace caused by natural forces or a criminal act, or (2) an order to evacuate a workplace, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act. The law was designed essentially to allow for employee protections related to wildfires and school shootings, though it is drafted much more broadly than that.

This law requires employees, where feasible, to notify the employer of the emergency condition. The law does not apply to first responders, disaster service workers, employees on military bases, and employees of residential care facilities, among others.

The prohibition on taking or threatening adverse action against an employee for refusing to report to or leave a workplace because they feel unsafe may require employers to update their attendance policies, potentially making modifications related to discipline for employees who call out or leave a shift early. Also, the prohibition on preventing an employee from accessing their mobile device for emergency purposes may require employers to revise their mobile device policy, particularly in certain industries that may prevent employees from accessing mobile devices at all times during an ongoing shift.

Reproductive Health Now Should Be Included In Anti-Discrimination Policies

The Contraceptive Equity Act of 2022 amends the Fair Employment & Housing Act (“FEHA”) to include reproductive health decisionmaking as a protected class, making it unlawful to harass, discriminate, or retaliate against individuals on that basis. Reproductive health decisionmaking, includes, but is not limited to, an individual’s decision to use or access a particular drug, device, product, or medical service for reproductive health. The law specifically calls out usage of birth control, contraceptives, and voluntary sterilization services as needing to be protected choices.

Employers should review their handbooks and policies, and update their anti-harassment, anti-discrimination, and anti-retaliation prevention policies to reflect the new protected class “reproductive health decisionmaking” under the FEHA. Employers should also consider updating training materials in 2023 to reflect the new protected class and include interactive examples, as they currently do with other protected categories.

Minimum Wage Increase Means Double Check Employee Wages and Exempt Employee Status

The California minimum wage will increase to $15.50 per hour for all employers in the new year.

This increase in the minimum wage affects means you may have non-exempt employees that need raises, and it may create upstream affects that your company will want to consider giving raises to lower level managers as well.

Also significant for employers, with the rise in minimum wage, the minimum annual salary requirement for overtime exempt employees also goes up. California law requires that employees subject to the administrative, professional, or executive exemptions receive a salary that is at least two times the state minimum wage. Because of the increase to the state minimum wage, effective January 1, 2023, the minimum annual salary for employees under these exemptions will also increase to $64,480.

Note that select California cities in the greater Bay Area, Silicon Valley, San Diego, West Hollywood, and others will raise the minimum wage for non-exempt employees working within city limits. Non-exempt employees working within one of these cities must be paid the local minimum wage when greater than the California state minimum wage.

Employers should check to make sure that they have up-to-date minimum wage posters in their breakrooms, and should check with payroll to make sure that all employees are making the correct minimum wage in the new year, and that exempt employees are making at least the statutory minimum.

Don’t Forget About San Francisco’s Public Health Emergency Leave Ordinance

This year, San Francisco voters passed Proposition G, a new Public Health Emergency Leave Ordinance (PHELO), which became operative on October 1, 2022. As we previously blogged about in detail, San Francisco employers with 100 or more employees worldwide, must provide up to 80 hours of paid Public Health Emergency Leave to each employee who performs work in San Francisco. This is in addition to any paid time off, including paid sick leave under the San Francisco Paid Sick Leave Ordinance.

Any covered San Francisco employers who have not already updated their leave policies, should revise accordingly to comply with this Ordinance.

…And the West Hollywood Paid Time Off Ordinance

As discussed more in depth in our prior blog, on November 15, 2021, West Hollywood enacted an ordinance requiring employers to allow accrual of up to 96 paid hours per year for sick leave, vacation, or personal necessity to full-time employees, and instituting a number of other requirements. On May 16, 2022, West Hollywood amended the Ordinance, and recently released regulations and administrative materials, such as required posters regarding the new minimum wage and the time off components.

West Hollywood employers who have not already updated their policies accordingly, take note!

Workplace Solutions

Just because New Year’s is famous for dropping a big ball doesn’t mean your company has to! Before you start singing “Auld Lang Syne,” reach out to Seyfarth’s Handbooks and Policy Development Group to begin your new year off right and ensure your handbook and policies are in compliance with California law.

Edited by Coby Turner

Seyfarth Synopsis: As we blogged about previously, California passed a landmark pay transparency law in September 2022. As promised, the Labor Commissioner’s office has issued FAQs addressing big employer questions regarding who is covered, information required to be disclosed, and details on remote job postings.

On December 27, 2022, the California Labor Commissioner’s office released eagerly anticipated Frequently Asked Questions (“FAQs”) on the state’s new pay scale disclosure requirements under the Equal Pay Act, which are effective on January 1, 2023.

This guidance clarifies some of the major outstanding questions on compliance with the requirements introduced in SB 1162.

The FAQs clarify which employers will be subject to the pay disclosure requirements and the content of the mandatory disclosures. Of note, the FAQs do not clarify whether the requirements only apply to postings made on or after January 1, 2023, or if it will apply to all postings that remain active as of January 1, 2023.

Who Must Comply?

Under Labor Code 432.3, “an employer with 15 or more employees must include the pay scale for a position in any job posting.” The FAQs explain that the Labor Commissioner will count employees using the same methodology applied for Supplemental Paid Sick Leave as explained in a previous FAQ (which in turn leans on the FAQs related to California’s state minimum wage requirements)—i.e. using the definition from Labor Code 1182.12, the disclosure requirements apply if an employer has at least one employee located in California, so long as it employs “directly or indirectly, or through an agent or any other person” 15 or more people.

Does This Apply to Remote Postings?

If a position can be filled in California, either remotely or in person, then the pay scale must be included in job postings.

What Must Be Disclosed?

Pay Scale Definition

The FAQs confirm that a pay scale is limited to the “salary or hourly wage range the employer reasonably expects to pay for a position.” A set hourly rate or set piece rate may be included in place of a pay scale if an employer “intends to pay a set hourly amount or a set piece rate amount, and not a pay range.”

Bonuses, tips, and other benefits are not required to be included in the pay scale. Employers may voluntarily provide information on “compensation or tangible benefits provided in addition to a salary or hourly wage.” However, employers should take note that the Labor Commissioner reminds employers that “other forms of compensation may be considered for equal pay purposes.”

Mandatory Disclosure of Piece Rate and Commission Compensation

In a relatively unique Cal-peculiarity, where a person’s hourly or salary wages is based on a piece rate or commission, then the employer must include the piece rate or commission range the employer reasonably expects to pay for the position.

How Can Employers Make Disclosures?

In a key departure from some of the other jurisdictions that have enacted pay scale disclosure requirements, employers cannot link to the salary range in an electronic posting or include a QR code in a paper posting. The pay scale must be included on the posting itself.

Reminder of New Record Retention Requirement

In addition to the new pay scale disclosure requirements, an employer must keep records of a job title and wage rate history for each employee for the duration of the employment plus three years after the end of the employment. These records must be open to inspection by the Labor Commissioner, which the Labor Commissioner will then use to determine whether there is a pattern of wage discrepancy.

What Should You Do to Prepare?

Employers should ensure that all job postings posted on or after January 1, 2023, contain the required pay scale information. In particular, employers who previously intended to provide links to the pay scale should instead include the pay scale directly in the job postings.

It is imperative to carefully review postings before they are created, as employers who fail to comply can be subject to penalties ranging from $100 and no more than $10,000 per violation.

Workplace Solutions

Seyfarth’s Pay Equity Group is available assist you in finalizing your pay scale disclosures and can provide guidance on any related pay transparency questions. There is also no time like the present to engage your teams in pay reviews to ensure compliance with pay transparency laws in California, nationwide, and around the globe, so please don’t hesitate to reach out to your favorite Seyfarth lawyer to see what we can do to help.