California Employment Law – Key Updates Employers Need to Know

Employment law is one of the fastest-changing areas of law in California. Every year, several important new labor laws take effect, and 2024 is no different.

California enacted several new employment laws for 2024. What are the key changes and what do employers need to prepare for?

There were dozens of changes. However, the ones that almost every employer needs to deal with, and the ones the employees will certainly know about relate to leaves of absence, marijuana use, and policies.

California Paid Sick Leave changed from 24 hours per year to 40 hours or 5 days, whichever is greater (alternative work week employees could get between 48-50 hours). Effective January 1, 2024, employers who front loaded should front load a lump sum of 5 days or 40 hours, whichever is greater. Employers who use the accrual method must make three days or 24 hours of sick leave available to the employee by the 120th day of employment, and an additional two days or 16 hours available by the 200th calendar day of employment, for a total of five days or 40 hours. Employees under the accrual method must now carry over 10 days or 80 hours of accrued paid sick leave each year, rather than six days or 48 hours. Employees’ use of accrued paid sick leave may now be capped at 40 hours or five days’ paid sick leave.

Off-Site, Off-Duty Marijuana Use. Employers may not discriminate against applicants or employees because they have (1) used cannabis off the job and away from the workplace, or (2) because a drug screening found non-psychoactive cannabis metabolites. Building and construction trades are exempt from this law. Employers need to update their hiring procedures, as the law precludes employers requesting prior use of cannabis or reviewing the same in a criminal history unless the employer is permitted to consider or inquire about that information under state or federal law for the specific position.

Employers are still allowed to have drug-free workplace policies, and employers may still use scientifically valid drug tests conducted through methods that screen for current impairment. Nothing in the laws permit employees to possess, be impaired by or use cannabis on the job, even for medicinal purposes.

Labor Code 2810.5 Notice (Wage Theft Prevention Notice). California Labor Code section 2810.5 requires employers to provide written notice to employees about employers name, rates of pay workers compensation, and sick leave and is required for all hourly employees upon hire and within 7 days of any changes to the terms of employment. AB 636, among other things, adds a new requirement that the notice provide information on “the existence of a federal or state emergency or disaster declaration applicable to the county or counties where the employee is to be employed, and that was issued within 30 days before the employee’s first day of employment, that may affect their health and safety during their employment.” California published an updated Wage Theft Prevention Notice to address the amendments.

Reproductive Loss Leave. Employers of 5 or more employees must provide up to 5 days of protected leave to an employee if the employee has (1) worked for the employer for at least 30 days and (2) suffered a reproductive loss event, which is a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction. The five days of protected leave can be taken intermittently but should be taken within three months of the event. If an employee experiences more than one reproductive loss event within a 12-month period, the employer is obligated to provide up to 20 days within a 12-month period. This is unpaid leave, but employees can elect to use vacation or sick leave.

Non-Compete Agreements. California has a long history of preventing restrictions on post-employment competition and solicitation. In 2024, new statutes were added that void such agreements, and require notice of prior agreements being void. This blanket ban applies “regardless of whether the contract was signed and the employment was maintained outside of California.” Employees have a private right of action to enforce the law and can obtain injunctive relief, actual damages and an award of attorneys’ fees if they prevail. AB 1076, a companion bill, requires employers to notify current and former employees (employed after Jan. 1, 2022) in writing by Feb. 14, 2024, that any noncompetition clause or agreement already entered into is void. If employers have such agreements in place and have not notified employees they should do so.

New Requirement to Develop and Implement a Workplace Violence Prevention Plan. This law adds Section 6401.9 to the California Labor Code, which requires nearly all California employers to establish, implement and maintain an “effective” workplace violence prevention plan by July 1, 2024. Under the new law, a covered employer must establish a workplace violence prevention plan, a deployment procedure for training employees on the plan, procedures for post-incident response and investigation, and procedures for the employer to review and update the plan for effectiveness annually, or sooner if a deficiency is observed, or after an incident of violence. There are also detailed log requirements requiring employers to log workplace violence hazard identifications, evaluations and corrections, as well as the employer’s investigations. The requirements are new and extensive and failure to comply can carry assessment of monetary penalties. Thus, employers should begin development early.

Whistleblower Protections – Rebuttable Presumption. SB 497 establishes a rebuttable presumption of retaliation if an employer takes an adverse action against an employee within 90 days of the employee engaging in certain protected activities, such as complaining about an equal pay violation or an employment practice that the employee reasonably believes is unlawful. Employers, however, can still defend against retaliation claims by articulating a legitimate, nonretaliatory reason for the employment action, which then shifts the burden back to the Employee. It is important for employers to properly document and date performance violations in order to establish the non-retaliatory basis for actions taken.

Other than the recent employment law changes, what are the key challenges facing employers?

The primary challenge for every employer is managing compliance. There are not just dozens of laws that affect employers each year, but also existing laws are constantly being changed, expanded or interpreted differently based on legal cases. The legislature will often try to settle the divide, but often just create more confusion for employers. Adding to the rapid changes in the law, is the fact that well trained HR professionals lack the time and ability to train managers that are interacting with employees on these unique nuances. Thus, most companies have compliant laws, but the consistent deployment of those laws can be a challenge.

Google has reached a $27 million settlement with employees who accused the tech giant of unfair labor practices, setting a record for the largest agreement of its kind. With so many legal updates, internal policies and procedures, regulations, and compliance, what are the potential risks facing employers in California?

The greatest risks to employers are (1) lack of continuity between the government and the courts and (2) lack of proper training of managers that interact with employees daily. The legislature sets laws, and the Division of Labor Standards and Enforcement (DLSE) publishes and updates a manual that provides guidance and instruction on how the myriad of laws are to be interpreted for guidance purposes only. However, their guidance has been adhered to for decades. More and more frequently the courts will interpret the statutes and legislation differently than the DLSE. Decisions that go against well settled practices, procedures and policies are then retroactively applied, rendering what was a lawful policy not only unlawful, but unlawful for the four years prior to the date of the court decision.

Compounded with changes in interpretation law is a lack of means to provide notice to employers of these daily changes to the laws. Thus, leaving many in the dark that well settled practices have been rendered unlawful or non-compliant.

Training for owners and human resources professionals is not enough -– they in turn must train their managers. This training should be done live – not plug and play videos or long-winded written procedures. As a litigator, I will often see that a company has compliant legal policies that are not followed by managers because the managers did not know the rules or know of the changes made to handbooks. Companies should not expect that managers will read the handbook or its many variations over the years, or better yet understand a written policy. The individuals managing the work force need to have regular and routine trainings to make sure they know what is expected of them and also be allowed to provide feedback on how to better manage such policies. All hourly employees receive rest breaks in California, however, how those are deployed will differ for at home workers, restaurant workers, drivers, and desk job employees. It is important that companies are not just learning the law, but learning how to apply it to their specific positions and industries. Through this process of interactive management training, if done in a collaborative way, a company can troubleshoot areas of concern, get ahead of possible problems, and build a more positive work environment.

ABOUT:

Berliner Cohen is a full-service business litigation firm, representing companies from inception to wind down. Its seasoned attorneys advise on corporate and tax needs, guide employers on California and Federal Employment laws both daily and in litigation, handle real estate transactions whether it be leasing, sales or development, as well as providing sound estate planning strategies for owners and executives. Berliner Cohen prides itself on offering innovative and sophisticated legal advice combined with a keen awareness and understanding of our clients’ business needs.

Christine Long is the Chair of the Employment Law Department. Ms. Long has handled hundreds of cases, successfully defended employers in Class Action matters defeating class certification as well as at trial defending successfully on PAGA and other individual claims. Ms. Long regularly advises clients on how to navigate California employment laws deploying individual strategies for employers based on their unique needs. 

Contact

Christine H. Long, Partner
Berliner Cohen, LLP
10 Almaden Blvd, 11th floor
San Jose, CA 95113
Telephone: +1 408.286.5800
Email: christine.long@berliner.com
Website: www.berliner.com

Published by: www.lawyer-monthly.com