2023 CA Employment Legislation Update

After attending the?California State HR Advocacy and Legislative Conference in Sacramento last week, I wanted to share a few highlights.?With the?deadline for bills to pass each house coming up on June 2, we take a look at the most significant labor and employment related bills on the Legislature's docket for continued consideration.

Non-Discrimination

New Proposed FEHA Protected Classes:?The Family Caregiver Anti-Discrimination Act,?AB 524 , would add family caregiver status — defined as “a person who is a contributor to the care of one or more family members”—“a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or any other individual related by blood or whose association with the employee is the equivalent of a family relationship” — as a FEHA-protected class.?SB 403 , introduced as a spot bill, has been amended to add caste as a protected class to various laws including the FEHA and Unruh Act.?SB 461 ?was originally intended to expand the FEHA “religious observance” protected category to more broadly include “cultural observance” or a religious, cultural, or heritage holiday or ceremony. However, this bill? has been amended to instead deal with state employees’ allotment of time off for observance of religious holidays.

Veterans:?SB 73 , the Voluntary Veterans’ Preference Employment Policy Act, would permit private employers to establish and maintain a written veterans’ preference employment policy that would need to be applied uniformly to hiring decisions and allow a voluntary preference for hiring a veteran over another qualified applicant.?SB 855 ?would prohibit employers from requiring an employee who is a veteran to work on Veterans Day, subject to certain requirements, including that: (1) the employee provide advance notice of his or her intent to take the day as a holiday; (2) the employee provide proof of veteran status; and (3) absences on this date, either individually or in the aggregate, do not negatively impact public health or safety, or significantly disrupt the employer’s operations.?

Criminal Conviction History:??SB 809 , the?“Fair Chance Act of 2023”?would make it an unlawful employment practice to: (1) take adverse action against an employee or applicant based on arrest or conviction history; and (2) end an interview, reject an application, or otherwise terminate the employment application process based on conviction history information provided by any source unless the conviction history “has a direct and adverse relationship with one or more specific duties of the job documented.” The bill would also provide a specific individualized assessment, notice, and response process that must be followed if the employer initially determines that an employee or applicant’s conviction history disqualifies them from employment or promotion.?The bill would also add elements to the required notification to be provided to the consumer; impose posting, records retention, and other requirements; and authorize employers to conduct a conviction history background check only in specified circumstances, e.g., when “[a]n individual with a particular conviction history is prohibited by federal or state law from holding the position sought,” or when the employer is required to compile such information pursuant to federal law.

Leaves and Accommodations

Paid Sick Days Accrual and Use:??No legislative year in California is complete without a paid sick leave expansion bill.?SB 616 ?would increase mandatory paid sick leave, and an employer’s authorized limitation on the use of annual carryover sick leave, from 24 hours or 3 days each year of employment to 56 hours or 7 days. The bill would also increase sick leave accrual thresholds from 48 hours or 6 days to 112 hours or 14 days.

Paid Family Leave Expansion:?Continuing the?“designated person” theme from 2022?bills,?AB 518 ?would expand eligibility for benefits under the paid family leave program to include individuals who take time off work to care for a seriously ill “designated person,” defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” The bill would authorize the employee to identify the designated person when they file a claim for benefits.

Leave for Loss Related to Reproduction or Adoption:?Following on?2022’s mandatory (unpaid) bereavement leave,?SB 848 ?would require employers to provide eligible employees up to 5 days of (unpaid, unless the employer has an existing policy stating otherwise) reproductive loss leave upon suffering a miscarriage, unsuccessful assisted reproduction, failed adoption, and other similar events.?

Reasonable Accommodation: Remote Work:?SB 731 ?would amend FEHA to require an employer to grant the reasonable accommodation request of an employee with a qualifying disability to work remotely, provided (1) the remote work request originated prior to the onset of the pandemic; (2) the employee “performed their essential job functions remotely for at least 6 of the 24 months preceding the renewed request;” and (3) the employee’s essential job functions have not changed and are still able to be performed remotely.?

Wage/Hour/Labor Code Bills

Layoff Notifications:?AB 1356 ?would amend California’s Worker Adjustment and Retraining Act (Cal-WARN), to expand its application beyond industrial or commercial facilities to all places of employment that have employed 75 or more persons in the preceding 12 months at all facilities located within California and to labor contractors. The bill would increase the period within which the employer must provide notice prior to ordering a mass layoff from 60 to 90 days, and revise “mass layoff” to include employees at or reporting to a covered establishment. The bill would also prohibit employers from, and subject them to penalties for, including a general release, waiver of claims, or nondisparagement or nondisclosure agreement as a condition of payment for which the employer is liable under Labor Code section 1402 unless obtained in exchange for additional and separate consideration.

Retaliation Rebuttable Presumption:??SB 497 ?would create a rebuttable presumption of retaliation under Labor Code sections 98.6 and 1197.5 if an employer discharges, threatens with discharge, demotes, suspends, retaliates against, or otherwise subjects an employee to an adverse action within 90 days of an employee engaging in conduct protected by those sections. The bill would increase the civil penalty?imposed on an employer under section 1102.5 from $10,000 to $10,000 per employee per violation, awarded to the aggrieved employee(s), and expands the penalty to employers that are not corporations or LLCs.

Workweek Adjustments:??SB 703 , the “California Workplace Flexibility Act of 2023,” would permit an individual nonexempt employee to request an employee-selected flexible work schedule providing for workdays up to 10 hours per day within a 40-hour workweek without the obligation to pay overtime compensation for those additional two hours in a workday.?AB 1100 ?would allow employers with five or more employees to apply for grants to the DIR for the purpose of administering pilot programs that provide each employee the option to work a 32-hour workweek.

Caregiver Rest Periods:?AB 1031? would exempt employers from requiring a nonexempt employee be relieved of all duties for rest periods if the employee is providing direct support to an individual with an intellectual or developmental disability in an integrated community setting, under prescribed circumstances, provided that another rest period be authorized and permitted reasonably promptly after the circumstances that led to the interruption have passed. If circumstances do not allow the employee to take a replacement rest period, the bill would require the employer to pay the employee one hour of pay at the employee’s regular rate of pay for the missed rest period.

Paid Sick Days: Health Care Employees:?AB 1359?would establish new procedures governing the accrual and use of paid sick leave days for employees of a covered “health care facility,” unless covered by an existing CBA. The bill would permit accrued paid sick days to carry over to the following year of employment for those employees, subject to certain conditions, and would prohibit a covered health care facility from limiting an employee’s use of accrued paid sick days. The bill would authorize an employee to bring a civil action against employer that violates this provision.

Wage Theft: Alternative Enforcement:?AB 594 ?would authorize public prosecutors to prosecute violations of the Labor Code independently and without direction from the DLSE, DWC, Cal-OSHA within their geographic jurisdictions, make available prevailing party attorneys’ fees, costs, and injunctive relief, and exempt these actions from any arbitration agreement between the employer and employee.

Miscellaneous Other Bills

California Worker Freedom from Employer Intimidation Act:?SB 399 ?would prohibit an employer from requiring its employees to participate in meetings or communications whose purpose is to (very broadly) communicate the employer’s opinion about religious or political matters, or rights guaranteed by the First Amendment, with limited exceptions.

Unlawful Employee Contracts:?AB 747 ?would add new prohibitions on contractual employment and post-employment terms, including in part (1) prohibiting employers from requiring employees, prospective employees, or former employees to pay for a debt if the individual’s employment or work relationship with a specific employer is terminated; (2) prohibiting employers from imposing penalties, fees, or costs on an employee or independent contractor for terminating the employment relationship; and (3) prohibiting employers from entering into or presenting employees or prospective employees as a term of employment or attempting to enforce any covenant not to compete that is void.

Non-Competes:?AB 1076 ?would codify?Edwards v. Arthur Andersen LLP?(2008) 44 Cal.4th 937, which held that the statutory provision voiding noncompete contracts must be broadly construed to void the application of any noncompete agreement in an employment context, or any noncompete clause in an employment contract, no matter how narrowly tailored. The bill would also make it an unlawful employment practice, and unfair competition under the UCL, to even include a noncompete clause in an employment contract, or to require an employee to enter into a noncompete agreement.

Defamation Privilege: Sexual Harassment:?AB 933 ?would extend the defamation privilege to expressly include “[a] communication made by an individual, without malice, regarding an incident of sexual assault, harassment, or discrimination.”

Workplace Violence Restraining Orders: Harassment:?SB 428 ?would permit employers to seek restraining orders on behalf of their employees not only for violence or credible threat of violence, but also for harassment, or “a knowing and willful course of conduct directed at a specific person that seriously alarms, annoys, or harasses the person, and that serves no legitimate purpose.” The bill would not permit a court to issue such an order if doing so would prohibit speech or activities protected by the National Labor Relations Act or provisions governing the communications of exclusive representatives of public employees.

Industry-Specific Bills

Health Care Employee Pay:??SB 525?would increase pay to at least $25 per hour for health care employees performing any work on the premises of a covered health care facility starting January 1, 2024. The bill would require the minimum wage rate to increase annually.?

Chain Businesses Notice Requirements to Displaced Workers:?SB 627 ?would require chain businesses consisting of 100 or more nation-wide establishments to provide a 60-day displacement notice prior to closing a location to employees who have worked for the employer for at least six months at the subject location and satisfy other requirements.?For one year after the closure of a covered establishment, employers must offers workers the opportunity to remain employed by the employer and to transfer to a location of the chain within 25 miles of the establishment subject to closure as positions become available.

Right to Recall in Hospitality:?SB 723 ?amends Labor Code 2810.8, to expand hospitality employees’ right to recall after being laid off, removing the restriction and original purpose that it be due to COVID-19. The bill would also remove the December 31, 2024, sunset date.

Successor Grocery Employers:?AB 647 ?and?SB 725 ?would all place new requirements on successor grocery employers, reminiscent of legislative efforts in 2014-2015.

Fast Food-Industry Changes:?AB 1228 ?would make fast food restaurant franchisors jointly and liable with their franchisees for the franchisees’ violations of prescribed laws, including PAGA. This proposal is back after being amended out of 2022’s FAST Act, which established the Fast Food Council, and is presently suspended due to a referendum petition.?SB 476 ?would require an employer to pay costs associated with the employee obtaining a food handler card, including the time it takes for the employee to complete the training, the cost of the food handler certification program, and the time it takes to complete the certification program.

For a more detailed overview of the current bills, please click?here ?for CalSHRM's update.