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2023 New Laws for Small Businesses in California

In 2022, California Gov. Gavin Newsom signed many laws impacting California employers.  

Some of the new laws became effective immediately and others, including some that were signed into law just weeks ago, take effect January 1, 2023, or later. These new laws address several topics, including supplemental paid sick leave, pay transparency, leaves of absence, and more. 

Small Business Laws – See more details on each below 

 

Minimum Wage Law 

The minimum wage in California is increasing to $15.50 per hour on January 1, 2023, for all employers — regardless of the number of workers employed by an employer.  

Also, many cities and local governments in California have enacted minimum wage ordinances exceeding the state minimum wage. 

 

California Privacy Rights and Enforcement Act (CPRA) 

In addition, the California Privacy Rights and Enforcement Act (CPRA), which amends the prior California Consumer Privacy Act (CCPA), takes effect on January 1, 2023.  

Unless the legislature or Gov. Newsom acts prior to January 1, 2023, the CPRA eliminates employer exemptions in the CCPA applicable to employee/applicant data and expands on several areas of the CCPA, and creates several privacy-related obligations for employers, including:
 

  1. Notifying applicants, employees and contractors about the categories of personal information that is or may be collected by the employer, and describing the purpose(s) for the collection and disclosure of such information, and providing information regarding the sharing and retention of personal information,  
  1. Employees’ rights to access or restrict the use or disclosure of certain categories of personal information, 
  1. Employees’ rights to correct or delete personal information (subject to statutory exemptions that may apply), and  
  1. Employees’ rights to request the personal information that has been collected about them during the preceding 12 months. 

The CPRA also establishes a new agency, the California Privacy Protection Agency, which is responsible for implementing and enforcing the law, including issuing potential fines of $2,500 per violation and $7,500 per intentional violation.  

Although the CPRA takes effect January 1, 2023, any personal information about employees collected by employers dating back to January 1, 2022 will be subject to compliance with the CPRA. 

 

AB 152 – COVID-19 Supplemental Paid Sick Leave (Effective Sept. 29, 2022)

AB 152 extends through December 31, 2022, COVID-19 Supplemental Paid Sick Leave (SPSL), which would have otherwise expired on September 30, 2022, under SB 114 signed earlier by Gov. Newsom on February 9, 2022.   

This bill does not require employers to provide additional hours of leave beyond the amount of SPSL under SB 114. As such, to the extent an employee has used all SPSL prior to September 30, 2022, this bill does not provide for new paid leave. 

Additionally, under SB 114, if an employee tests positive for COVID-19, the employer is allowed to require the employee to submit to another diagnostic test on or after the fifth day after the test and provide documentation to the employer. Under AB 152, if the second test is positive, the employer may require the employee to submit to a second test within no less than 24 hours. This bill reaffirms that the employer must make such tests available at no cost to the employees, but that the employer may decline to provide SPSL benefits where the employee refuses to provide documentation of test results or refuses to submit to a test. 

This bill further establishes the California Small Business and Nonprofit COVID-19 Relief Grant Program within the Governor’s Office of Business and Economic Development (GO-Biz) to assist qualified small businesses or nonprofits that are incurring costs for SPSL. The bill requires GO-Biz to provide grants to qualified small businesses or nonprofits, as defined. The bill repeals these provisions on January 1, 2024. 

AB 152 took immediate effect upon its enactment on September 29, 2022. This bill makes a number of revisions to the Government Code, Labor Code and the Revenue and Taxation Code. Please refer to AB 152 for the impacted code sections. 

 

AB 1041 – Leave: Designated Person (Effective Jan. 1, 2023) 

Under the California Family Rights Act (CFRA), an employer with five or more employees must provide eligible employees who meet specified requirements to take up to a total of 12 workweeks in any 12-month period for family care and medical leave as defined by the CFRA. 

 AB 1041 amends the CFRA and expands the class of people for whom an employee may take leave to care for under the CFRA to include a “designated person.” This bill defines “designated person” to mean any individual related by blood or whose association with the employee is the equivalent of a family relationship. Further, this bill provides that the employee may identify the designated person at the time the employee requests leave and that the employer may limit the employee to one designated person per 12-month period. 

 This bill also expands the definition of family member under the Healthy Workplaces, Healthy Families Act of 2014 (aka the CA Paid Sick Leave Law) to include a “designated person.” Similar to the provisions of the CFRA discussed above, for purposes of the CA Paid Sick Leave Law, the employee may identify the designated person at the time the employee requests paid sick days and the employer may limit an employee to one designated person per 12-month period for paid sick days. 

 This bill amends Section 12945.2 of the Government Code and Section 245.5 of the Labor Code. 

 

AB 1949 – Bereavement Leave (Effective Jan. 1, 2023) 

 AB 1949 amends the CFRA and provides that eligible employees who have been employed for at least 30 days may take up to 5 days of unpaid leave (subject to an employee’s ability to use available paid time off) related to the death of a family member. Family member means a spouse or a child, parent, sibling, grandparent, grandchild, domestic partner or parent-in-law (the same definition of family member under CFRA). 

 Under this bill, bereavement leave need not be taken in consecutive days, but the bereavement leave must be completed within three months of the date of death of the family member.  

 Further, within 30 days of the first day of the leave, the employer may request that the employee provide documentation of the death of the family member. “Documentation” includes, but is not limited to, a death certificate, a published obituary or written verification of death, burial, or memorial services from a mortuary, funeral home, burial society, crematorium, religious institution or governmental agency.  

 The employer must maintain the confidentiality of any employee requesting bereavement leave and any documentation the employee provides to the employer must be maintained as confidential and shall not be disclosed except to internal personnel or counsel, as necessary, or as required by law. 

In addition, to the extent an employer has an existing bereavement policy, the bereavement leave must be taken pursuant to the employer’s existing bereavement leave policy. If the employer does not have an existing bereavement leave policy, the bereavement leave may be unpaid; but the employee may use vacation, personal leave, accrued and available sick leave or compensatory time off that is otherwise available to the employee. 

If the employer’s existing leave policy provides for less than five days of paid bereavement leave, the employee is entitled to no less than a total of five days of bereavement leave, consisting of the number of days of paid leave under the employer’s existing policy, and the remainder of days of leave may be unpaid; but the employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee.  

And if the employer’s existing leave policy provides for less than five days of unpaid bereavement leave, the employee is entitled to no less than five days of unpaid bereavement leave; but the employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee. 

This bill also provides that an employee’s right to bereavement leave is to be construed as separate and distinct from any other right employees have under the CFRA. 

Finally, the bill exempts employees subject to a collective bargaining agreement if certain conditions are met. 

This bill amends Section 12945.21 and 19859.3 of, and adds Section 12945.7 to, the Government Code. 

 

AB 2188 – Off-Duty Use of Cannabis (Effective Jan. 1, 2024) 

AB 2188 amends the California Fair Employment and Housing Act (FEHA) to make it unlawful for an employer to discriminate on the basis of a person’s use of cannabis off the job and away from the workplace or based on an employer-required drug test that found non-psychoactive cannabis metabolites in the person’s hair, blood, urine, or other bodily fluids.  

This bill allows exceptions for preemployment drug screening that does not screen for non-psychoactive cannabis metabolites. Certain employees and applicants are also exempt, including those in the building and construction trades and those whose positions require a federal background investigation or clearance. 

This bill specifically provides that “[n]othing in this section permits an employee to possess, to be impaired by, or to use, cannabis on the job. Further, this bill provides that it does not “affect the rights or obligations of an employer to maintain a drug- and alcohol-free workplace […] or any other rights or obligations of an employer specified by federal law or regulation.” 

This bill amends Section 12954 to the Government Code. 

 

AB 2693 – COVID-19 Exposure (Effective Jan. 1, 2023) 

Exiting law requires employers to provide notice to the local public health agency in the event of a COVID-19 outbreak. AB 2693 amends existing law in Labor Code section 6409.6 and provides that employers no longer have to give notice to the local public health agency in the event of a COVID-19 outbreak.  The California Department of Public Health will also no longer be required to post workplace information received from local public health departments about COVID-19 cases and outbreaks.  

Existing law also requires that an employer who receives a notice of potential exposure to COVID-19, the employer is required to take specified actions within one business day of the notice of potential exposure, including providing written notice to all employees on the premises at the same worksite that they may have been exposed to COVID-19. 

AB 2693 revises and recasts the notification requirements and authorizes an employer to either provide written notification or prominently display a notice in all places where notices to employees concerning workplace rules or regulations are customarily posted and requires the notice to remain posted for 15 days. This bill also requires an employer to keep a log of all the dates the notice was posted and requires the employer to allow the Labor Commissioner to access those records. This bill extends these provisions until January 1, 2024. 

This bill amends Sections 6325 and 6409.6 of the Labor Code. 

 

SB 189 – DFEH Renamed to CRD (Effective July 1, 2022) 

Pursuant to SB 189,the Department of Fair Employment and Housing’s name changed to the Civil Rights Department. As stated on the CRD’s website, this change is to more accurately reflect the CRD’s powers and duties, which include enforcement of laws prohibiting hate violence, human trafficking, discrimination in business establishments, and discrimination in government-funded programs and activities, among others. The Fair Employment and Housing Council’s name has also changed, and it is now referred to as the California Civil Rights Council. 

This bill impacts other areas of California law unrelated to employment laws and makes various revisions to the Business and Professions Code, the Civil Code, the Education Code, the Government Code, the Health and Safety Code, the Labor Code, the Penal Code, the Revenue and Taxation Code, the Unemployment Insurance Code and the Vehicle Code. Please refer to SB 189 for the impacted code sections. 

 

SB 1044 – Emergency Conditions in the Workplace: Employer Prohibitions (Effective Jan. 1, 2023) 

SB 1044 prohibits an employer, in the event of an emergency condition, from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace or worksite within the affected area because the employee has a reasonable belief that the workplace or worksite is unsafe. This prohibition does not apply to certain groups of employees enumerated in the text of the bill, including but not limited to first responders, employees required by law to render aid or remain on the premises in case of an emergency, and employees whose primary duties include assisting members of the public to evacuate in case of an emergency. 

The bill defines “emergency condition” to mean the existence of either of the following: 

  • Conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act. 
  • An order to evacuate a workplace, a worksite, a worker’s home or the school of a worker’s child due to natural disaster or a criminal act. 

“Emergency condition” does not include a health pandemic. 

SB 1044 also requires employees to notify their employer of the emergency condition requiring them to leave or refuse to report to the workplace or worksite (either prior to leaving or refusing to report, when feasible, or – when prior notice is not feasible – after leaving or refusing to report as soon as possible).  

Further, in the event of an emergency condition, the bill prohibits an employer from preventing any employee from accessing the employee’s mobile device or other communications device for seeking emergency assistance, assessing the safety of the situation, or communicating with a person to confirm their safety.  

Finally, in the event a current or former employee brings an action that could be brought pursuant to the Labor Code Private Attorneys General Act (PAGA) for violations of these prohibitions, the bill gives employers the right to cure alleged violations as set forth in Section 2699.3. 

This bill adds Chapter 11 to Part 3 of Division 2 of the Labor Code. 

 

SB 1126 – CalSavers, Retirement Savings (Effective Jan. 1, 2023) 

Under existing law – the CalSavers Retirement Savings Trust Act, administered by the CalSavers Retirement Savings Board (CalSavers Board) – employers with five or more employees that do not sponsor a retirement plan are required to participate in 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 program account in the program. 

SB 1126 expands the definition of “eligible employer” to include any such person or entity that has at least one eligible employee and that satisfies the requirements to establish or participate in a payroll deposit retirement savings arrangement.  Excluded from the definition of “eligible employer” are sole proprietorships, self-employed individuals, or other business entities that do not employ any individuals other than the owners of the business.  

This bill further requires eligible employers with five or more employees that do not offer a retirement savings program, to have a payroll deposit savings arrangement to allow employee participation in the program within 36 months after the CalSavers Board opens the program for enrollment. By December 31, 2025, eligible employers with one or more eligible employees that do not provide a retirement savings program, are required to have a payroll deposit savings arrangement to allow employee participation in the program. 

This bill amends Sections 100000 and 100032 of the Government Code. 

 

SB 1162 – Pay Transparency Law (Effective Jan. 1, 2023) 

SB 1162 requires employers with 15 or more employees to disclose pay scales for a position in any job posting and requires employers to maintain records of job titles and wage rate history for each employee for the duration of employment plus three years. It also sets new pay data reporting requirements based on protected characteristics, changes the date for submitting pay data reports and establishes significant civil penalties for non-compliance. A more detailed overview is linked here. 

This bill amends Section 12999 of the Government Code and Section 432.3 of the Labor Code. 

 

SB 1477 – Enforcement of Judgments: Wage Garnishment (Effective Sept. 1, 2023) 

Existing law sets forth procedures for the levy of a judgment debtor’s wages when required to enforce a money judgment. Existing law specifies that the maximum amount of a judgment debtor’s disposable earnings for any workweek that is subject to levy shall not exceed the lesser of 

  • 25% of the individual’s disposable earnings for that week. 
  • 50% of the amount by which the disposable earnings for the week exceed 40 times the state minimum hourly wage (or, the local minimum hourly wage, if greater than the state minimum hourly wage). 

Existing law also specifies certain multipliers to determine the maximum amount of disposable earnings subject to levy for any pay period other than a weekly pay period. 

SB 1477 modifies the formula for determining what portion of a judgment debtor’s wages can be garnished in order to satisfy a judgment for persons, beginning September 1, 2023, such that the maximum amount of disposable earnings of a judgment debtor for any workweek that is subject to levy must not exceed the lesser of the following: 

  • 20% of the individual’s disposable earnings for that week. 
  • 40% of the amount by which the individual’s disposable earnings for that week exceed 48 times the state minimum hourly wage (or, the local minimum hourly wage, if greater than the state minimum hourly wage). 

This bill also reduces the multipliers used to determine the maximum amount of earnings subject to levy for any pay period other than a weekly pay period. 

This bill amends, repeals and adds Section 706.050 of the Code of Civil Procedure. 

 

SOURCES: 

Last Alert Email: https://mailchi.mp/vma/alert-2022-03-17 and https://mailchi.mp/vma/alert-2022-03-pro 

Resource and Credit goes to: 

https://www.faegredrinker.com/en/insights/publications/2022/10/new-california-laws-for-2023-and-beyond-what-employers-should-know 

 

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