Mid-year Employment Law Updates

Keeping up with changes in employment laws and regulations is crucial for California employers to maintain compliance and effectively manage their workforce. There have been several mid-year employment law changes that have gone into effect since the beginning of 2023. Today we will be covering those updates and providing recommendations on how to ensure your business’s compliance. Staying informed about these updates and implementing necessary changes will help employers navigate legal requirements and maintain a fair and compliant work environment.

Minimum Wage

California’s state minimum wage for all non-exempt employees, regardless of employer size, increased to $15.50 per hour effective January 1, 2023. Several California cities also saw local minimum wage increases at the start of the year. However, several cities within the greater San Francisco Bay Area increased their minimum wage effective July 1, 2023.

Recommendation:

? Review pay records for all employees (hourly and salaried) to ensure your salaries meet minimum wage and pay thresholds.

? Businesses with employees in Alameda, Berkeley, Emeryville, Fremont, Milpitas and San Francisco should review pay records to ensure that all hourly employee wages meet the minimum for the city where the work is performed. Minimum wage information and city-specific required minimum wage posters can be found on the city webpages.

Pregnant Worker Fairness Act (PWFA)

Effective June 27, 2023, PWFA is a federal act designed to bridge the gap in protections for pregnant workers that are not covered by other federal or state laws. PWFA requires private and public sector employers with at least 15 employees to provide reasonable accommodations to employees and candidates for “known limitations related to pregnancy, childbirth or related medical conditions”, including mental and physical conditions.

Reasonable accommodations are defined as “changes to the work environment or the way things are done at work.” Employees need only communicate to the employer the limitations and are not required to provide medical certification verifying the need for the requested accommodation. And the employer must engage the interactive process with the employee or applicant to determine how it may provide the requested accommodation.?

PWFA does not specifically state what would be considered a reasonable accommodation, but recent guidance from EEOC has provided examples of what would qualify as a reasonable accommodation under the act. Examples include the ability to sit, ability to eat or drink water while on shift, access to closer parking, flexibility in work hours, providing appropriately sized uniforms and safety apparel, additional break time to use restroom, being excused from strenuous activities or exposure compounds or chemicals deemed unsafe for pregnancy.

Employers may decline accommodations under PWFA if they can show that providing the requested accommodations would cause the business undue hardship on the employer's operations, defined as “significant difficulty or expense for the employer.” However, the bar to establish undue hardship is high. Completely the interactive process will be a crucial step in complying with PWFA. Under PWFA, covered employers are also prohibited from:

? Denying a job, promotion, transition or other employment opportunity to a qualified employee or candidate based on their need for a reasonable accommodation.

? Require an employee to accept an accommodation without engaging the interactive process with the employee.

? Require the employee to take leave as the accommodation if another reasonable accommodation is available that would allow the employee to continue working.

? Retaliate against an employee for requesting accommodations under PWFA or anyone reporting unlawful discrimination or participating in a PWFA proceeding, such as an investigation.

? Interfere with any individual’s rights under PWFA.

Recommendation:

? Review and update accommodations policies.

? Review job groups and identify potential accommodations.

? Train supervisors and HR personnel on the requirements of PWFA and how to recognize

potential requests for accommodation from eligible employees.

Arbitration Agreements

California employers were banned from requiring arbitration agreements as a condition of employment with the passage of Assembly Bill 51 starting January 2020. After the 9th Circuit’s Ruling earlier this spring, employers may once again require mandatory arbitration for certain employment disputes as a condition of employment.

Recommendation:

? Review current agreements and decide if it’s best for your company to require mandatory

arbitration as a condition of employment or elect to have a voluntary arbitration agreement.

? Review your options with counsel and update agreements as needed, ensuring they include carve outs for claims on which you cannot compel arbitration.

? Continue to monitor the developments should the state seek further appellate review.

Severance Agreements – Confidentiality and Non-disparagement Clauses

The NLRB recently took steps to significantly restrict the rights of employers to offer or enforce severance and other agreements containing confidentiality and non-disparagement provisions that include overly broad waivers of employee rights under Section 7 of the National Labor Relations Act (NLRA).?

Guidance from NLRB clarifies several issues:

? Presenting an employee with an agreement containing overly broad terms is an unfair labor practice

? Agreements that require employees to forfeit certain rights may still be allowed as long as they are narrowly tailored

? Overly broad confidentiality and non-disparagement provisions generally will not invalidate other lawful provisions of the agreement

? Prohibitions on overly broad confidentiality and non-disparagement clauses apply retroactively to agreements already entered

? That maintaining such agreements is a continuing violation not subject to the NLRA's six-month statute of limitations.

Recommendation:

? Discuss with counsel if separation, settlement and other agreements containing confidentiality and non-disparagement provisions are appropriate for your business.

? Update and narrowly tailor all agreements with confidentiality and non-disparagement clauses to carve-out activities protected by Section 7 of the NLRA.

? Determine if prior signed severance agreements contain new unlawful provisions and ensure that these provisions are not enforced.

? Consider if advisable to notify former employees who signed severance agreements that any unlawful (2023) provisions will not be enforced.

CalSavers

All California employers are required to either enroll into the state’s retirement savings program for workers or to provide another qualifying retirement savings program, such as a 401(k). Deadlines to register and enroll employees for most employers have passed. Starting January 1, 2023, all employers with an average of 1-4 employees (as reported to the EDD in the preceding calendar year), who are not otherwise exempt from participation, must also register with CalSavers. The registration deadline for these employers is December 31, 2025, though you may choose to register and make the program available to employees now. You can find more information at https://employer.calsavers.com.

AB 1288 – Employment Discrimination & Cannabis

Effective January 2024, this bill prohibits employers from taking adverse action based on either an employee’s use of cannabis while off the job and away from the workplace or, a drug-screening test that finds the employee to have “non psychoactive cannabis metabolites in their hair, blood, urine or other bodily fluids. Employees may still be prohibited from allowing an employee to possess, use or be impaired by cannabis while on the job or at the workplace.

Recommendation:

? Review, update or create drug and alcohol policies to comply with AB 1288.

Labor Law Postings

All employers must ensure that required state and federal labor law posters are refreshed and posted, either onsite or electronically as allowed, each January.

For employers with 15 or more employees, EEOC has issued a new mandatory workplace poster titled Know Your Rights: Workplace Discrimination is Illegal. This new posting was issued on October 20, 2022, and supersedes an update posted one day earlier on October 19, 2022.

Additionally, the U.S. EEOC updated its Know Your Rights: Workplace Discrimination is Illegal poster, that is required for employers with 15 or more workers.

Recommendation:

Ensure that you have current federal, state and local labor law posters available to all employees.