Last week, Governor Newsom finished signing 890 bills into law from the 2023 legislative session, while also vetoing 156 bills. These decisions will have far-reaching implications for California employers.
One of the most significant areas impacted is worker protection. California has long been at the forefront of progressive labor and employment laws, and the bills signed by Governor Newsom continue this tradition. Here are some key highlights:
New Laws
Presumption of Retaliation for Adverse Employment Actions Made within 90 Days of Certain Protected Activity (SB 497)
This bill establishes a presumption of retaliation if an employee or applicant engages in specified protected activity and faces disciplinary action or termination within ninety days of doing so. The burden of proof then shifts to the employer to prove that the adverse action was not retaliatory. The specified protected activity includes filing a complaint regarding unpaid wages, alleged equal pay violations, or improper political activities, among other activities.
Paid Sick Leave Entitlement Increases from Three to Five Days Annually (SB 616)
Currently, California requires employers to provide a minimum of three days (or 24 hours) of paid sick leave per year to their employees, either through an accrual or front-loaded method. Existing law also permits employers to impose a ceiling on accrued paid sick leave of 6 days (or 48 hours). This bill increases the minimum annual entitlement of paid sick days to five days (or 40 hours) and raises the minimum accrual ceiling to 10 days (or 80 hours).
California Adds More Safeguards for Victims of Workplace Harassment or Discrimination (AB 933)
Current law protects victims of sexual harassment from defamation claims when they report an incident of sexual harassment, so long as the communication was based upon credible evidence and was made without malice. This bill extends that protection to victims of sexual assault and other types of harassment and discrimination. Therefore, employees who report unlawful workplace harassment or discrimination of any type cannot be liable for defamation unless their statements lacked credible evidence or were made with malice.
California Broadens Employee Protections Against Noncompetition Agreements (AB 1076 and SB 699)
Under existing law, noncompetition agreements are void and unenforceable in California, except in limited circumstances, such as when the employee sells a business. AB 1076 takes existing law a step further and makes it unlawful for employers to impose an unenforceable noncompetition clause or agreement on employees. The law further specifies that imposing an unlawful noncompetition clause or agreement constitutes unfair competition under California law. Finally, AB 1076 imposes a new notification requirement on employers. Specifically, the bill requires employers to notify all current and former employees who were employed after January 1, 2022, with whom the employer has an unenforceable noncompetition clause or agreement, that the agreement is void. Employers must provide this written, individualized notice to the current or former employee’s last known address and email address by February 14, 2024.
Relatedly, SB 699 extends California’s ban on noncompetition clauses and agreements to all agreements, regardless of the state in which the agreement was signed or the state in which the employee works or worked. Additionally, this bill creates a private right of action so that employees can pursue a civil claim against an employer that enters into an unlawful noncompetition agreement with an employee.
Vetoed Legislation
Governor Newsom vetoed some interesting employment and labor bills. Below are a few noteworthy examples from this legislative session.
SB 731: Work From Home Rights
This bill would have required employers to provide 30 calendar days’ written notice before requiring an employee who is working remotely to return to in-person work. The notice would have been required to include specified language informing employees of their right to request continued remote work as a reasonable accommodation for a disability. In his veto statement, Governor Newsom stated that this bill “would impose an inflexible 30-day advance notice requirement of return-to-work that would not take into account the needs of any particular employer.” In vetoing this bill, Governor Newsom emphasized the impracticality of it, “especially in times of critical need and emergencies.” This message suggests a similar bill may be reintroduced in the future, likely with additional employer discretion.
AB 524: Discrimination—Family Caregiver Status
This bill would have added “family caregiver status” to the list of groups protected by the Fair Employment and Housing Act (FEHA). The bill would have increased rights and protections for those caring for “chosen” family members. Newsom stated: “While I appreciate the intent of this bill, I am concerned about the large burden it will place on employers, especially given the ambiguous nature of the language.”
SB 403: Ban Caste Discrimination
This bill would have explicitly banned caste discrimination. Governor Newsom stated he believed the measure was “unnecessary” because various other forms of discrimination, such as based on color, ancestry, and national origin, are already prohibited by California law.
SB 627: Displaced Workers—Opportunity to Transfer
This bill was directed at “chain employers,” which are employers that operate multiple locations under the same name or brand. For example, the bill’s legislative history identifies Walmart, Amazon, CVS, Bed Bath & Beyond, Macy’s, and Starbucks. This bill would have required chain employers to give advance notice of a store closure and give workers the right to transfer to a location within 25 miles when a position becomes open. In rejecting the bill, Governor Newsom explained that it imposed “new notice requirements, transfer rights, processes and criteria, and associated penalties” that would have resulted in “significant burdens on employers.”
Law Clerk Summer Khatib contributed to this article.
