New Labor & Employment Laws for California Employers in 2023

December 20, 2022 | ,

A newspaper with the headline Changes coming in 2023

As we ring in the New Year in 2023, a number of new labor & employment laws that were passed during the California 2022 Legislative Session will also go into effect.  Below is a brief summary of the more significant new labor & employment laws that will become effective on January 1, 2023, unless otherwise indicated.

COVID-19/Emergency Conditions

AB 1751 – COVID-19 Workers’ Compensation Presumptions

This bill extends existing workers’ compensation determinations and presumptions based on COVID-19 exposures through January 1, 2024.  (Amends Labor Code §§ 3212.86-3212.88).

AB 2693 – COVID-19 Exposure Notices

Following the COVID-19 pandemic in 2020, the Legislature passed AB 685 (2020) and AB 654 (2021) to require specific notice requirements to employees and affected employee associations at a workplace where a positive COVID-19 case has been present.  AB 2693 extends an employer’s obligation to provide such potential exposure notices through January 1, 2024, but also provides other alternatives for such notifications, including a workplace posting.  The bill also eliminates the obligation to notify a local public health agency of an outbreak and applies the notice requirements to health care employers who were previously exempted.  (Amends Labor Code §§ 6325, 6409.6).

SB 1044 – Worker Rights in Emergency Conditions

SB 1044 creates a new law to provide California employees certain rights to apply during a specific “emergency condition”, which includes conditions caused by natural forces or a criminal act that result in disaster or extreme peril to the safety of persons or property, or that result in an order to evacuate a workplace, worker’s home or school of a worker’s child.  However, a “health pandemic” is specifically excluded from the definition.  This law creates new employee rights that preclude an employer from taking or threatening an adverse action against the employee for refusing to report to work or leaving a workplace because of reasonable belief it is unsafe during an emergency condition.  The law also precludes an employer from restricting an employee’s access to their mobile phone/communication device to seek assistance, assess safety, or communicate to verify safety during an emergency condition.  There are specific exemptions from the law for certain employees based on their underlying job duties.  (New Labor Code § 1139).

Wage & Hour

Updated State Minimum Wage and Overtime Exemption Salary Basis Test

Effective January 1, 2023, the California Minimum Wage will be $15.50/hour for all employers, regardless of size.  This also results in an increase to the minimum salary for most overtime exempt employees to $64,480/year ($1,240/week).

AB 257 – Fast Food Accountability and Standards Recovery Act

This new law establishes a 10-Member Fast Food Council under the Department of Industrial Relations to establish minimum standards on wages, working hours, and other working conditions for fast food restaurant workers of a fast food chain, including minimum wage.  A “fast food chain” is defined as a set of restaurants consisting of 100 or more establishments nationally with a common brand.  This new law is currently set to sunset on January 1, 2029.  (Amends Labor Code § 96 and adds new §§ 1470-1473).

AB 2955 – Extension of Borello Exemption for Commercial Fishing Industry

This law extends one of the temporary “Borello” exemptions to the “ABC Test” for independent contractor status for the commercial fishing industry through January 1, 2025.  (Amends Labor Code § 2783).

SB 1334 – Meal and Rest Periods for Public Sector Health Care Employees

While most public sector employees are exempt from California’s meal and rest period requirements, SB 1334 now applies such requirements to public sector employees who provide direct patient care and are covered under Wage Orders 4 and 5.  (Amends Labor Code § 512.1).

Family & Medical Leave

AB 1041 – Adds “Designated Person” as a Covered Family Member for CFRA and Paid Sick Leave Law

Covered employees under the California Family Rights Act (CFRA) and California’s Paid Sick Leave Law are permitted to take applicable leave to care for a covered family member, which currently includes parent, parent-in-law, child, spouse, registered domestic partner, grandparent, grandchild and sibling.  AB 1041 now adds “designated person” to that list of covered family members and is defined as “any individual related by blood or whose association with the employee is the equivalent of family relationship.”  An employer may limit an employee to one designated person per 12-month period for CFRA and Paid Sick Leave Law purposes.  (Amends Government Code § 12945.2 and Labor Code § 245.5).

AB 1949 – Bereavement Leave of Absence Rights

Employers are now required by law to provide up to 5 days of bereavement leave to employees for the death of a family member (parent, parent-in-law, child, spouse, registered domestic partner, grandparent, grandchild and sibling).  The bereavement leave is unpaid by default unless an employer has an existing policy to provide paid bereavement leave, which the employer is required to maintain.  An employee can use available accrued paid leave (vacation, paid time off, sick leave, compensatory time off, etc.) for any portion of the bereavement leave that is otherwise unpaid.  The bereavement leave must be completed within three (3) months of the death of the family member, but the leave days need not be consecutive.  An employer may also require documentation of the applicable family member’s death within 30 days of the first day of bereavement leave.  The employer is also obligated to maintain the confidentiality of the employee requesting bereavement leave.  (New Government Code § 12945.7).

SB 951 – Increased SDI/PFL Benefits

SB 951 will increase the State Disability Insurance (SDI) and Paid Family Leave (PFL) wage replacement rates from 60-70% of an employee’s wages to 70-90% of such wages effective January 1, 2025.  To help fund this increase in SDI/PFL wage benefits, the existing taxable wage ceiling for employee SDI/PFL wage deductions will be eliminated effective January 1, 2024.  (Amends Unemployment Insurance Code §§ 985, 2655, & 3301).

Employment Discrimination

SB 189 – Renames DFEH to Civil Rights Department

Effective July 1, 2022, California’s former Department of Fair Employment and Housing (DFEH) has now been renamed as the Civil Rights Department (CRD).  In addition, the former Fair Employment Housing Council (FEHC) is now called the Civil Rights Council (CRC).  Their new website is:

SB 523 – Adds “Reproductive Health Decisionmaking” as Protected Category under FEHA

In response to the June 2022 U.S. Supreme Court decision of Dobbs v. Jackson Women’s Health Organization, which overturned the Court’s previous Roe v. Wade decision regarding a constitutional right to abortion, SB 523 codified under state law a number of legal protections for “reproductive health decisionmaking”.  This included adding reproductive health decisionmaking as a protected category under California’s Fair Employment Housing Act as applied to employment discrimination, harassment, and retaliation.  Reproductive health decisionmaking is defined as “a decision to use or access a particular drug, device, product or medical service for reproductive health.”  (Amends Government Code §§ 12921, 12926, 12931 & 12940).

SB 1162 – Employee Pay Scale Transparency

SB 1162 adds new requirements for employers to follow in disclosing pay scale information for job positions.  First, all employers are now required to provide a current pay scale to an employee upon request for their job positions.  Employers are also required to maintain records of job title and wage rate history for each employee during their duration of employment and three additional years after the end of employment.  Such records are subject to inspection by the Labor Commissioner.  Employers with 15 or more employees are also required to include the pay scale for a position in any job posting and are responsible for providing such pay scale to any third party that is engaged to distribute a job posting for the employer.  Failure to follow these requirements can lead to penalties.  Finally, SB 1162 also requires that a private employer with 100 or more employees must include with their existing pay data reporting obligations the median and mean hourly rate of pay within each job category for each combination of race, ethnicity and sex.  Similar information on employees hired through labor contractors must also be provided.  The Labor Commissioner will enforce all the requirements of SB 1162 and is authorized to issue penalties for any violations.  (Amends Government Code § 12999 and Labor Code § 432.3).

SB 2188 – Adds “Off-Duty Use of Cannabis” as Protected Category under FEHA (Effective January 1, 2024)

Effective January 1, 2024, it will be unlawful for an employer to discriminate against an applicant or employee for their use of cannabis off the job and away from the workplace.  Employers will also be prohibited from using a drug screening test that includes detection of nonpsychoactive cannabis metabolites, which could be the result of such off-duty use.  Exemptions to the law apply to employees in the building and construction trades, employees/applicants subject to federal government background investigation or security clearance regulations, and employees/applicants required by law to undergo drug testing (e.g., DOT covered employees).  (New Government Code § 12954).

Labor Relations

AB 2183 – Modifies secret ballot election process for agricultural employees under ALRA

AB 2183 expands the secret ballot election process for agricultural employees to designate a collective bargaining representative under the Agricultural Labor Relations Act (ALRA), to also provide for the alternatives of a mail ballot election or through petition with proof of majority support, subject to certain procedural requirements.  (Adds Labor Code §§ 1156.35-1156.37, 1160.10, and 1162).

Conclusion – Employers Need to Prepare Now for These New Laws

In light of the new labor & employment laws referenced above, employers need to review their existing policies and practices and make any necessary changes to ensure compliance.  This includes revising Employee Handbooks/Personnel Rules, discrimination/harassment policies and leave of absence policies.  Boutin Jones Inc.’s Employment Law Group attorneys are available to assist employers with policy revisions to ensure compliance with these new laws, in addition to providing legal advice on the impacts of these new laws.