New Laws and Compliance Updates for California Employers in 2023

Holly Sutton, Rebecca Stephens, and Jamie Talt

California has passed several new or amended employment laws covering topics ranging from off-duty marijuana use, reproductive rights, California Family Rights Act, COVID-19, criminal law and the workplace, new avenues of enforcement against employers, privacy, and pay transparency, among others. Some of these laws took effect January 1st, 2023, while others will take effect January 1st, 2024. Employers should evaluate their personnel rules and practices to ensure they keep pace with these changes. Fair Employment and Housing Act Amendments

Fair Employment and Housing Act Amendments

AB 2188: No Adverse Action for Off-Duty Marijuana Use Starting in 2024 Current California law generally allows workplace drug testing of current employees only when there is evidence of an employee’s impairment (with exceptions to this rule for certain safety-sensitive occupations). But most drug tests are only able to determine whether the individual has used cannabis in the previous few weeks (by screening for nonpsychoactive cannabis metabolites), and do not reflect whether an individual is under the influence of marijuana at the time of the test.

While prior law permitted adverse action against employees for off-duty marijuana use, AB 2188, which goes into effect on January 1st, 2024, will prohibit adverse action against an employee for such use. Instead, the new law only authorizes adverse action against employees who are impaired in the workplace, thus necessitating a review of employers’ drug and alcohol policies and procedures to ensure compliance with the new law.

SB 523: No Discrimination Based on Reproductive Health Decision-Making Under existing law, the Fair Employment and Housing Act (FEHA) makes it unlawful for employers to discriminate against employees and job applicants on the basis of a protected category, such as their race, age, sex, or medical condition. With the introduction of SB 523, also known as the Contraceptive Equity Act of 2022, the FEHA now includes “reproductive health decision-making” as a protected category. This includes, for example, an individual’s use or access to a particular drug, device, product, or medical service for reproductive health. Moreover, employees cannot be required to disclose their reproductive health decision-making to their employer as a condition of employment, and employers are not permitted to take adverse action based on that decision-making.

SB 523 also requires that employer-provided healthcare plans now cover over-the-counter contraceptives and prohibits those plans from imposing cost-sharing, such as deductibles, copayments, or other such requirements, for vasectomies. This law will go into effect on January 1st, 2024. California employers should ensure they are prepared by updating the relevant language, including any references to protected categories, in their written employment policies.

AB 2960: FEHA Tolling Under existing law, individuals may file a complaint with the Civil Rights Department (CRD, formerly the Department of Fair Employment and Housing or DFEH) if they believe they have experienced discriminatory employment practices. If the CRD does not bring a civil action within 150 days of the individual’s complaint, it will notify the individual of their right to request a right-to-sue notice. If the individual does not request the notice, the CRD will issue the notice once it has completed its investigation and within one year of the individual’s date of filing.

AB 2960, which went into effect on January 1st, 2023, tolls these dates during any mandatory or voluntary dispute resolution proceeding. The tolling period begins on the date the CRD refers the case to its dispute resolution department and ends when the dispute resolution department has closed its record on the case.

California Takes Further Steps to Protect Reproductive Rights

AB 2223: Exercising Reproductive Rights Under the existing Reproductive Privacy Act, individuals have a right to privacy with respect to their reproductive decisions. This includes the right to choose or refuse birth control, bear children, or obtain an abortion. With the passage of AB 2223, individuals may now bring a lawsuit against employers under the Tom Bane Civil Rights Act for any alleged interference with their rights under the Reproductive Privacy Act.

AB 2134: Reproductive Health Information If a religious employer provides healthcare coverage to employees that does not include benefits or coverage for abortion and contraceptives, this bill requires that the employees be provided with written information on the abortion and contraceptive services that may be available to them at no cost through the California Reproductive Health Equity Program. This bill also requires that the Department of Industrial Relations also post on its website information about the abortion and contraceptive benefits that may be available to employees at no cost through the California Reproductive Health Equity Program.

California Family Rights Act Updates

AB 1949: Required Bereavement Leave AB 1949 requires California employers with at least five employees to offer five days of bereavement leave to employees each time they lose a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. Though the leave may be unpaid, employees may choose to use accrued vacation, sick leave, or other paid time off options available to the employee. If the employer requests documentation evidencing the family member’s death, they must keep the information confidential.

AB 1041: Expansion of CFRA and Paid Sick Leave to Cover “Designated Person” Under the California Family Rights Act (CFRA) and the Healthy Workplaces, Healthy Families Act of 2014 (California’s Paid Sick Leave law), eligible employees may take time off from work to care for a child, parent (including a parent-inlaw), spouse, registered domestic partner, grandparent, grandchild, or sibling. AB 1041 expands this list to allow employees time off to care for a “designated person.” This went into effect on January 1st, 2023.

Employees need not specify a “designated person” prior to their leave request, but the employer can limit employees to one designated person per 12-month period. For leaves under the CFRA, a designated person must be a blood relative or an individual “whose association with the employee is the equivalent of a family relationship.” The legislation does not further define who may be considered “the equivalent of a family relationship” at this time. Until further guidance is released, the conservative approach is to leave this determination to the employee. No such qualifier exists for leaves under the Healthy Workplaces, Healthy Families Act of 2014.

Criminal Law Updates with Workplace Implications

AB 2777: Sexual Assault AB 2777 creates a one-year window (from January 1st, 2023 to December 31st, 2023) for plaintiffs who allege they are victims of sexual assault to raise otherwise time-barred claims if they allege (1) one or more entities are legally responsible for damages arising out of the sexual assault; and (2) the entities, including their officers, directors, representatives, employees, or agents, engaged in a “cover-up” or “attempted cover-up” of a previous instance or allegation of sexual assault by an alleged perpetrator of such abuse.

“Cover-up” means a “concerted effort to hide evidence relating to a sexual assault that incentivizes individuals to remain silent or prevents information relating to a sexual assault from becoming public or being disclosed to the plaintiff, including, but not limited to, the use of nondisclosure agreements or confidentiality agreements.”

Significantly, AB 2777 also revives any “related claims” arising out of the sexual assault, such as wrongful termination and sexual harassment.

AB 2282: Hate Crime Expansion Existing law establishes criminal penalties for persons who place or display certain symbols (such as burning crosses, swastikas, or nooses) with the intent to terrorize a person, with varying penalties for different hate symbols. Beginning January 1st, 2023, AB 2282 amended existing law to increase the associated penalties and make them equal, regardless of which hate symbol is utilized.

AB 2282 also expands the locations where hate symbols are prohibited to include K-12 schools, colleges, cemeteries, places of worship, places of employment, private property, public parks, public spaces, and public facilities.

COVID-Related Legislation

AB 152: COVID-19 Supplemental Paid Sick Leave Set to Expire AB 152 extended the requirement for employers to provide COVID-19 Supplemental Paid Sick Leave (SPSL) through December 31, 2022. Unless the SPSL requirement is extended again, beginning January 1st, 2023, employers are no longer required to provide employees with COVID-19 SPSL. AB 152 also established a relief grant program administered by the Governor’s Office of Business and Economic Development for qualifying small businesses and nonprofits that have incurred costs for COVID-19 SPSL. The grant provision will be repealed on January 1st, 2024.

AB 551: Presumption of COVID-19 Occupational Injury for Public Employees AB 551 extends current laws governing COVID- 19 disability retirement until January 1st, 2024. For certain public employees who retire on the basis of a COVID-19-related illness, existing law creates a rebuttable presumption that their disability arose out of or in the course of their employment, making them eligible for disability retirement under California’s public retirement systems. Public employees eligible for this presumption are (1) firefighters, public safety officers, and health care job classifications, or their functional equivalents; and (2) members of the public retirement system who test positive for COVID-19 during an outbreak at their place of employment.

AB 1751: Presumption of COVID-19 Occupational Injury AB 1751 extends until January 1st, 2024 the current rebuttable presumption that employees who test positive for COVID-19 during an “outbreak” at the workplace have suffered an occupational injury and therefore are eligible for specified workers’ compensation benefits. An “outbreak” is defined as follows:

•for employers with 100 employees or fewer, four employees testing positive for COVID-19 within 14 calendar days;

•for employers with more than 100 employees, four percent of employees reporting to the place of employment testing positive for COVID-19 within 14 calendar days; and

•any specific place of employment that a local public health department, the State Department of Public Health, the Division of Occupational Safety and Health, or a community college district chancellor, school president, or school superintendent orders to close due to a risk of COVID-19 infection.

Employers have 45 days to accept or deny employees’ claims resulting from an “outbreak.” Employers may rebut the presumption, including by presenting “evidence of measures in place to reduce the potential transmission of COVID-19 in the employee’s place of employment and evidence of an employee’s nonoccupational risks of COVID- 19 infection.”

AB 2068: COVID Posters Under existing law, employers are required to prominently post citations, orders, and special orders issued by the Division of Occupational Health and Safety. AB 2068 requires that, in addition to posting orders, employers must post an employee notification prepared by OSHA, which states (1) an OSHA investigation found a violation that resulted in a citation or order; (2) the employer is required to post the notice for three days or until the unsafe condition is corrected; (3) the employer is required to communicate workplace hazards to the employees in a language they understand; (4) OSHA’s contact information and website where employees can search employer citations.

The employee notice must be prominently posted for three working days or until the unsafe condition is rectified, and in the top seven non- English languages used by limited Englishproficient adults in California, as determined by the most recent American Community Survey by the United States Census Bureau (currently Spanish, Cantonese, Mandarin, Vietnamese, Tagalog, Korean, and Armenian), as well as in Punjabi if not already one of the top seven languages.

AB 2693: Notices of COVID-19 Outbreaks Effective January 1st, 2023, AB 2693 amends California Labor Code § 6409.6 to modify employers’ duties to notify employees of potential exposure to COVID-19 and extends those duties until January 1st, 2024. Under prior law, employers were required to provide written notices to all employees individually within one business day of a confirmed case of COVID-19 on the worksite premises. Under the amended law, employers may prominently display notices in the workplace (in all places where notices are customarily posted, including employee portals) notifying employees of the potential exposure, in lieu of individual written notices. This worksite notice must include:

•the dates on which an employee with a confirmed case of COVID-19 was on the worksite premises within the infectious period;

•the locations of the exposure, including the department, floor, building, or other areas (but the location need not be so specific as to allow individual workers to be identified);

•contact information for employees to receive information regarding COVID-19 related benefits to which employees may be entitled under applicable federal, state, or local laws; and

•contact information for employees to receive the employer’s cleaning and disinfection plan pursuant to CDC guidelines and COVID-19 prevention program pursuant to Cal-OSHA’s COVID-19 Emergency Temporary Standards.

New Avenues of Enforcement Against Employers

AB 2766: Expanded Enforcement of UCL Under existing law, district attorneys, upon reasonable belief that there has been a violation of California’s Unfair Competition Law (UCL), are authorized to exercise all of the powers granted to the Attorney General to investigate the potential violation, including the authority to issue subpoenas. AB 2766 grants the same prelitigation investigatory powers to (1) a city attorney of any city with a population over 750,000; (2) to the county counsel of any county within which a city has a population over 750,000; or (3) to a city attorney of a city and county, when the city attorney or county counsel reasonably believes that there may have been a violation of the UCL. This went into effect on January 1st, 2023.

AB 1747: Contractor Discipline California’s Business and Professions Code contemplates disciplinary proceedings by the Contractors State License Board and civil penalties (not to exceed $30,000 for specified violations) for licensed contractors who commit willful and deliberate violations of “state building, labor, and safety laws.” AB 1747 adds “willful or deliberate disregard of any state or local law relating to the issuance of building permits” to the list of offenses.

AB 1788: Hotel Human Trafficking AB 1788 subjects hotels to civil penalties if a supervisory employee knew or should have known that sex trafficking activity was occurring inside the hotel and failed to report it within 24 hours. Penalties range from $1,000 to $10,000 depending on the number of annual violations. This went into effect on January 1st, 2023.

AB 257: Fast Food Accountability and Standards Recovery Act AB 257, or the Fast Food Accountability and Standards Recovery Act (FAST Act), is a first-in the-nation law that would establish a 10-member “Fast Food Sector Council” (Council) whose purpose would be to set sector-wide minimum standards on wages, working hours, and other working conditions for workers at fast food chains (i.e., restaurants consisting of 100 or more establishments nationally that share a common brand, or that are characterized by standardized options for decor, marketing, packaging, products, and services). Notably, the law would authorize the council to set a minimum wage of up to $22 per hour for fast-food workers in 2023.

Yet, shortly after its passing, AB 257 received significant opposition from restaurant owners and business groups. On December 5, the Save Local Restaurants coalition submitted more than one million petition signatures for a referendum on the FAST Act on the November 2024 ballot. In January 2023, the California Secretary of State verified that it qualified for a referendum, so the law will not take effect unless it is approved by voters in the November 2024 election.

AB 2183: Agricultural Worker Unionization Changes Under existing law, to unionize, agricultural workers must participate in person in a secret ballot election on the question of unionization. Beginning January 1st, 2023, AB 2183 creates two alternative procedures: (1) if the employer agrees to a “labor peace compact” prohibiting the employer from making statements for or against the union or conducting captive audience meeting with employees, workers can vote by mail-in ballot, or (2) if the employer does not agree to a “labor peace compact,” workers can organize by a majority of the employees signing a union representation authorization card, which must then be submitted and verified by the Agricultural Labor Relations Board.

AB 2183 also seeks to prevent unionization intimidation by creating a rebuttable presumption that an employer who disciplines, suspends, demotes, lays off, terminates, or takes any other adverse action against a worker during a labor organization’s campaign did so for retaliatory reasons. The employer can rebut this presumption with clear, convincing, and overwhelming evidence that the employer would have taken the same action in the absence of the organization's campaign. AB 2183 sunsets on January 1st, 2028.

AB 1601: WARN Requirements for Call Centers Under existing law, California’s Worker Adjustment and Retraining Act (Cal/WARN) requires covered employers ordering a mass layoff, relocation, or termination of non-seasonal employees at a covered establishment to provide at least 60 days' advanced written notice to affected employees, the Employment Development Department, local workforce investment board, and applicable local government officials. Existing law only governs employers who operate an industrial or commercial facility in California that employs or has employed 75 or more employees in the previous 12 months.

As of January 1st, 2023, AB 1601 expands Cal/WARN to require 60 days’ written notice for covered employers who operate a call center and wish to relocate a threshold portion of its operations to a foreign country. Call centers are defined as facilities or operations “where employees, as their primary function, receive telephone calls or other electronic communication for the purpose of providing customer service or other related functions.”

Covered employers must issue the 60 days’ written notice when relocating any of the following to a foreign country:

•An entire call center; or

•Operating units or facilities that cumulatively comprise at least 30 percent of the employer’s call center volume as measured by the past years’ average call volume.

Due to AB 1601’s broad definition of call center, employees who work remotely and primarily serve in a customer service role are likely covered by the statute. Covered employers should include these employees’ work volume in any threshold calculations to determine if their relocation plans trigger Cal/WARN advanced written notice requirements.

In addition, AB 1601 bars employers who engage in a qualifying call center mass layoff, relocation, or termination from state grants, state-backed loans, and tax credits for five taxable years, regardless of whether they complied with notice requirements unless waived by the Labor Commissioner.

AB 2243: Revised OSHA Heat Illness Rules Forthcoming Effective January 1st, 2023, AB 2243 requires the Division of Occupational Safety and Health, before December 1st, 2025, to submit a rulemaking proposal to consider revising the heat illness standard and wildfire smoke standard for certain employees, including farm workers.

AB 1775: Occupational Safety Training for Live Event Staff Effective January 1st, 2023, AB 1775 requires specific U.S. Department of Labor Occupational Safety and Health Administration (OSHA) training for employees charged with setting up, operating equipment at, or breaking down live entertainment events at public events venues. Contracting entities shall require entertainment events vendors to certify that their employees have completed the applicable “OSHA-10” course. Entertainment event vendors must also certify that employees that lead, supervise, or direct one or more workers in that same occupation and are employed in an occupation that may be certified by the Entertainment Technician Certification Program have completed an applicable “OSHA-30” course and are certified through a program relevant to the tasks they are supervising or performing unless the vendor certifies that its employees meet the conditions for a skilled and trained workforce. Vendors who do not comply are subject to OSHA citations.

State-Provided Benefit Program Changes

SB 1126: CalSavers Retirement Savings Program Under existing law, employers with five or more employees that do not offer an employer-sponsored retirement program are required to participate in a state-sponsored retirement program (CalSavers) and offer a payroll deposit retirement savings arrangement so that eligible employees may contribute a portion of their salary or wages to a retirement savings account in the program.

Effective January 1st, 2023, SB 1126 expands the definition of “eligible employer” to include any employer “that has at least one eligible employee and that satisfies the requirements to establish or participate in a payroll deposit retirement savings arrangement.” SB 1126 also specifically excludes sole proprietorships, self-employed persons, and businesses that do not employ any individuals other than the business owners.

SB 1126 sets the following deadlines for employers to enroll in a payroll deposit saving arrangement allowing employees to contribute portions of their paychecks to a qualifying retirement savings program (the deadlines for employers with more than 50 and 100 eligible employees remain the same): (1) for eligible employers with five or more employees, within 36 months after the board opens the program for enrollment; and (2) for eligible employers with one or more eligible employees, by December 31st, 2025.

Employers that do not offer an employersponsored retirement plan and are not already participating in CalSavers should note the expanded definition of eligible employers and consider whether they now fall under this statute. This law was also effective as of January 1st, 2023.

SB 951: Increased Unemployment and Family Temporary Disability Insurance Benefits SB 951 implements a sliding scale increase of state-paid disability benefits. Under current law, the State Disability Insurance/Paid Family Leave program pays approximately 60 percent of most workers’ wages when taking time off to care for their own serious injury or illness, to care for someone else’s serious injury or illness, or to bond with their baby. Beginning January 1st, 2025, SB 951 requires the state to pay between 70 and 90 percent (depending on income) of a disabled worker’s wages. Effective January 1st, 2024, SB 951 also eliminates the taxable ceiling on these benefits.

Additional Changes for Employers in 2023

CA Privacy Rights Act: Employer Exemptions Expiring The employer exemptions from the California Consumer Privacy Act (CCPA) are expiring at the end of 2022 – meaning that the CCPA will now apply to data collected by employers regarding employees. Covered employers should review their privacy policies and programs carefully to ensure compliance with the new requirements. Additional information can be found here.

SB 1044: New Protections in the Event of an Emergency Condition Effective January 1st, 2023, SB 1044 creates new protections for employees during “emergency conditions,” defined as the existence of either (a) disaster conditions due to natural forces or criminal act, or (b) an evacuation order due to natural disaster or criminal act, but excluding a health pandemic.

The bill prohibits employers, in the event of an emergency condition, from penalizing employees or absences or early departures resulting from an employee’s reasonable belief that the worksite is unsafe. The law requires employees to notify their employer of the emergency condition requiring the employee to leave early or refuse to report to work. Certain employees are exempted from this prohibition, including healthcare-facility employees and employees who provide emergency services.

The law also prohibits employers from preventing employees from using their cell phones to seek emergency assistance, assess the safety of the situation, or communicate with others to verify their safety.

The law does not apply when emergency conditions have ceased.

SB 1162: Pay Scale Disclosure and Pay Data Reporting Beginning January 1st, 2023, all California employers must share a position’s pay scale when (1) any current employee requests it for the position in which they are currently employed, and (2) any external applicant seeking employment requests it for the position in which they have expressed interest. The “pay scale” is the salary or hourly range that the employer reasonably expects to pay for the position (not including bonuses or equity-based compensation). California employers with 15 or more employees must also include a position’s pay scale in any internal or external job posting.

Similar to federal pay data reporting requirements, existing law in California requires employers with 100 or more employees to annually report pay data on each of 10 specified job categories to the California Civil Rights Division (CRD). This report is calculated from a “snapshot” of a single pay period of the employer’s choice between October 1st and December 31st.

SB 1162 establishes a civil penalty of up to $10,000 per violation of the pay scale disclosure and job posting requirements and a civil penalty of up to $200 per employee for a pay data reporting violation.

AB 984: Motor Vehicle Tracking Existing law authorized the Department of Motor Vehicles (DMV) to pilot the use of digital license plates. AB 984 authorizes the DMV to make these digital license plates (referred to as “alternative devices”) available to Californians beginning January 1st, 2023.

The bill generally prohibits the use of alternative devices that are GPS-equipped, except for fleet and commercial vehicles. Employers utilizing fleet or commercial vehicles with GPS-equipped alternative devices may monitor employees during work hours, but “only if strictly necessary for the performance of the employee’s duties.” “Monitor” means locating, tracking, watching, listening to, or otherwise surveilling the employee. The bill proscribes retaliation for employees’ removing or disabling the alternative device’s monitoring capabilities outside of work hours.

If an employer uses an alternative device to monitor employees, the law mandates the employer provide notice to employees. The law specifies what the notice should contain, including a description of the specific activities to be monitored, the data to be collected, and to who collected information will be disclosed or transferred.

Employers who violate these monitoring provisions are subject to civil penalties.

AB 1632: Employee-Restroom Accommodation for Public AB 1632, which went into effect January 1st, 2023, requires businesses open to the general public for the sale of goods who have employee restrooms to allow the use of those restrooms for individuals lawfully on the premises who have Crohn’s disease, ulcerative colitis, other inflammatory bowel diseases, irritable bowel syndrome, or another medical condition that requires immediate access to a toilet facility.

Businesses found to be willful or grossly negligent in their denial of qualified individuals are subject to a $100 civil penalty for each instance. Though businesses are allowed to require the individual to present “reasonable evidence” of an eligible medical condition (such as medical documentation), given the pragmatic constraints (e.g., the individual’s immediate need), businesses looking to reduce risk should grant restroom access and not ask for documentation.

The new law excludes a private right of action for enforcement.

SB 1477: Garnishment SB 1477 lowers the maximum amount of weekly wages that can be garnished from a judgment debtor to settle a judgment. Existing law allows garnishment of up to 50 percent of disposable weekly earnings that exceed 40 times the state minimum hourly wage. Effective September 1st, 2023, SB 1477 reduces the maximum garnishment formula to 20 percent of the individual’s disposable weekly earnings or 40 percent of the disposable weekly earnings that exceed 48 times the state minimum hourly wage (currently $744), whichever is less.

Minimum Wage Increase

Beginning January 1st, 2023, the minimum wage in California will be $15.50 (a $1.50 increase from 2022’s $14.00 minimum wage). Note that cities and counties may set higher minimum wages than the state; for example, the minimum wage for some of California’s largest cities is below.

City 2023 Minimum Wage

Los Angeles: $16.04 (for non-hotel workers)

San Diego: $16.30

San Francisco: $16.99

Oakland: $15.97 (for non-hotel workers)

Holly Sutton is a Partner and the Chair of the Farella Braun + Martel Employment Practice.

Rebecca Stephens is a Partner with Farella Braun + Martel Employment Practice.

Jamie Talt is a Senior Associate with Farella Braun + Martel Employment Practice.