Governor Newsom recently signed into law numerous bills that will affect California employers come January 1, 2024. Here is a quick overview of some of the new law that are relevant for employers.

Quick Hits

• The new California employment-related laws coming out of the current legislative session address paid leave, including reproductive loss leave; noncompete clauses; workplace violence prevention plans; retaliation related to employment terminations; and the healthcare worker minimum wage.
• Many of these laws have an effective date of January 1, 2024.

Paid Sick Leave (SB 616)

California’s new paid sick leave law, Senate bill (SB) 616, significantly expands California’s existing paid sick leave law (i.e., the Healthy Workplaces, Healthy Families Act of 2014).

Paid sick leave entitlement

Under SB 616, an employee is now entitled to five days or forty hours of paid sick leave. Previously, employees were entitled to three days or twenty-four hours.  

Accrual or frontload

Employers may still allow employees to accrue paid sick leave at the rate of one hour for every thirty hours worked. Regardless of the accrual rate, employees must be able to accrue forty hours by their 200th day of employment. Additionally, employees must be able to accrue at least twenty-four hours of paid sick leave by their 120th day of employment. Alternatively, employers may still “frontload” the entire amount of paid sick leave.

Increased annual usage cap

Employers may limit an employee’s annual use of paid sick leave to forty hours. Previously, an employee’s annual use could be capped at twenty-four hours.

Increased accrual cap

Employers may cap an employee’s paid sick leave accrual at eighty hours or ten days; previously, the accrual cap was forty-eight hours or six days.

Noncompete Agreements and Notice Requirements (SB 699, AB 1076])

SB 699 prohibits employers from entering into or attempting to enforce noncompete agreements with employees. The new law establishes that noncompete agreements are void in California regardless of where the employee worked when the employee entered into the agreement and/or where the employee signed the agreement.

Additionally, newly signed AB 1076 requires employers to notify current employees and former employees (employed after January 1, 2022) in writing by February 14, 2024, that any noncompete agreements they may have signed are void.

Reproductive Leave Loss for Employees [SB 848]

SB 848allows eligible employees to take up to five days of unpaid leave following a “reproductive loss event.” Employees experiencing a reproductive loss and wishing to take a leave must be employed with an employer with at least five employees for at least thirty days prior to the commencement of the leave. The law defines a “reproductive loss event” as the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction.

Workplace Violence Prevention Program (SB 553)

Starting July 1, 2024, California law will require employers to adopt comprehensive workplace violence prevention plans, either as part of their injury and illness prevention programs or as a separate document. SB 553 imposes specific requirements on employers, including:

• recording incidents or threats in a violent incident log;
• providing training to all employees; and
• maintaining records related to a workplace violence prevention plan.

Arbitration Enforcement (SB 365)

Currently, trial court proceedings are stayed until an appeal has been fully briefed and is ready to be heard by the appellate court (i.e., until the appeal is “perfected”). There are very limited exceptions to this rule. SB 365 amends California’s Code of Civil Procedure (CCP) to state that: “the perfecting of such an appeal shall not automatically stay any proceedings in the trial court during the pendency of the appeal.”

Employers will see this new law come into play when a court denies a petition to compel arbitration and the employer appeals that decision. SB 365 will allow litigation to continue during such an appeal.

Off-Duty Cannabis Use and Drug Test Results (AB 2188, SB 700)

California has two new laws going into effect related to cannabis use and drug test results. The first is AB 2188, which Governor Newsom signed in 2022 and will be effective January 1, 2024. AB 2188 makes it unlawful for an employer to discriminate against individuals in hiring, termination, or any term or condition of employment, or to otherwise penalize an individual for cannabis use or drug test results under certain circumstances. Specifically, the law prohibits employers from taking these actions for either: (1) off-duty cannabis use away from the workplace; or (2) the results of an employer-required drug screening test that has found individuals to have nonpsychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.

AB 2188 does not allow employees to possess or use marijuana on the job, nor does it interfere with an employer’s right to maintain a drug-free and alcohol-free workplace. An employer may still refuse to hire an applicant based on scientifically valid pre-employment drug screening conducted through methods that do not screen for nonpsychoactive cannabis metabolites. There are also certain exceptions to AB 2188 such as for employees in the building and construction trades.

Piggybacking off AB 2188, SB 700 expands California’s Fair Employment and Housing Act to protect applicants from discrimination based on prior cannabis use, with some exceptions. Specifically, SB 700 prohibits employers from requesting information from an applicant for employment relating to the applicant’s prior use of cannabis. Additionally, when an employer gathers criminal history information regarding an applicant’s prior cannabis use, SB 700 makes it unlawful for employers to use such information. There are exceptions for situations in which the  employer is permitted to consider or inquire about that information under state or federal law.

New Industry-Specific Laws

Increased Minimum Wage for Health Care Workers (SB 525)

This bill enacts a multi-tiered statewide minimum wage schedule for health care workers employed by certain covered health care facilities. Under this new law, “covered health facility” covers nearly all health care facilities except those owned, controlled, or operated by the California Department of State Hospitals, tribal clinics exempt from licensure, and outpatient settings operated by federally recognized tribes. “Covered health care employee” covers a broad range of employees, from physicians and nurses to janitors and clerical workers.

Fast Food Minimum Wage Increase to $20/hour (AB 1228)

This new bill repeals the FAST Food Accountability and Standards Recovery Act and replaces it with a $20 per hour minimum wage for fast food workers, among other provisions. Under this law, the minimum wage for California fast food restaurant employees will increase to $20 per hour starting April 1, 2024. This minimum wage will increase annually through 2029. AB 1228 also establishes the Fast Food Council which, starting in 2024, likely will make recommendations regarding other work place conditions.

Food Handler Cards (SB 476)

The California Health and Safety Code currently requires certain workers to obtain a food handler card within 30 days of their hire date and to maintain this card throughout their employment as a food handler. SB 476 requires employers to cover any cost associated with obtaining a food handler card. In addition to the certification program cost, this obligation includes payment for employees’ time required to complete training, the cost of testing, and any element required for the completion of the certification program.