Now that California's 2023 legislative session has closed and the governor's October 14 deadline to sign or veto new legislation has passed, California employers should take note of a handful of new California laws that will go into effect in 2024. Here we offer a short overview of the key new employment laws that employers should be aware of. Unless otherwise noted, all laws discussed will become effective on January 1, 2024.
Off-Duty/Off-Premises Cannabis Users (SB 700)
Last year, AB 2188 amended California's Fair Employment and Housing Act (FEHA) effective January 1, 2024, to prohibit adverse employment actions based on off-duty marijuana use that does not affect job performance. Specifically, effective January 1, 2024, it will be unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment based upon (1) a person's use of cannabis off the job and away from the workplace, or (2) an employer-required drug screening that has found an employee to have non-psychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.
SB 700 expands employee protection by also prohibiting employers from requesting information from an applicant relating to their prior use of cannabis or using information obtained about a person's prior cannabis use obtained from the person's criminal history, unless one of the limited exceptions set forth in California Government Code Section 12952(d) is met. Such exceptions include the following: (1) a position for which a state or local agency is otherwise required by law to conduct a conviction history background check; (2) a position with a criminal justice agency; (3) a position as a farm labor contractor; or (4) a position where an employer or agent thereof is required by state, federal, or local law to conduct criminal background checks for employment purposes or to restrict employment based on criminal history.
In sum: (a) employers can still prohibit employees from using or being impaired by cannabis at work, but cannot prohibit cannabis use away from work that does not affect their work; and (b) employers cannot ask applicants about their cannabis use or even check their criminal history for cannabis use (unless certain limited exceptions apply).
Additional Whistleblower Protections (SB 497)
SB 497 amends California Labor Code Sections 98.6, 1102.5, and 1197.5 to create a rebuttal presumption of retaliation if an employee is disciplined or discharged within 90 days of certain protected activity.
- Labor Code Section 98.6 prohibits an employer from taking adverse employment action against an employee because the employee has reported wage and hour violations
- Labor Code Section 1102.5 prohibits an employer from taking adverse employment action against an employee who threatens to disclose, or discloses, information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of a state or federal statute, rule, or regulation
- Labor Code Section 1197.5 prohibits an employer from taking adverse employment action against an employee for reporting or attempting to enforce rights pertaining to equal pay
SB 497 does not change the substance of the retaliatory acts that are prohibited. But if an employer takes adverse action against an employee within 90 days after that employee engages in an activity protected by those statutes, SB 497 places the burden on the employer to show some other legitimate, non-retaliatory reason for the adverse employment decision. This means it is more important than ever to accurately document performance issues and discipline in a timely manner.
Expansion of Paid Sick Leave (SB 616)
SB 616 expands California's existing paid sick leave law (the Healthy Workplaces, Health Families Act of 2014), requiring employers to provide at least five paid sick days (40 hours) per year to employees instead of three days (24 hours). SB 616 also raises the total amount of paid sick leave that employers must permit employees to carry over from year to year, from six days (48 hours) to 10 days (80 hours).
Employers should continue to follow local city ordinances regarding paid sick leave, where such city ordinances are more favorable than the statewide ordinance.
Leave of Absence Expansion (SB 848)
Currently, California law requires employers to provide employees with up to five days of bereavement leave upon the death of a family member. SB 848 expands upon this requirement, mandating all California employers to also provide up to five days of unpaid leave for an employee following "reproductive loss"-related events, including a miscarriage, failed adoption, failed surrogacy, stillbirth, or an unsuccessful assisted reproduction.
Workplace Violence Prevention Plan (SB 553)
SB 553 requires employers to create a workplace violence prevention plan. The plan must be in writing and accessible by employees. It can be included as a stand-alone section within an existing injury and illness prevention plan, or it can be maintained as a separate document.
SB 553 also requires employee training, which must be provided when the plan is first established, and once each year thereafter.
The new law also requires employers to maintain records of workplace violence incidents and investigations for a five-year period. The Division of Occupational Safety and Health (CAL/OSHA) is empowered to start enforcing SB 553 beginning on July 1, 2024.
New Ways to Challenge Non-Compete Agreements (SB 699 and AB 1076)
SB 699 extends the prohibition of employee non-compete agreements in California by explicitly providing that such agreements that are void under existing California law are also unenforceable under California law, regardless of when and where the contract was signed. It remains to be seen how broadly this new law will be applied in practice. For example, challenges based on jurisdiction, choice of law, and the limits of one state's ability to legislate issues primarily outside its borders will take center stage in disputes where the connection to California is tenuous and another state's interest is significant. The new law also provides employees with the ability to bring a private right of action to enforce the law and recover their attorney's fees and costs.
Relatedly, AB 1076 requires employers to notify current and former employees in writing by February 14, 2024 that any prior non-compete agreements that contravened the law are void.
What Employers Should Do Next
California employers should evaluate their current policies and practices to ensure compliance with these new laws. Next steps should include the following:
- Review and update employee handbooks or stand-alone policies
- Train and educate management on these new laws
- Consider partnering with outside counsel for a policy and practice compliance review
