Changes ahead for California employers

From increased minimum wages to new rules for Paid Family Leave, California is introducing legal changes that will impact employers statewide. Here is a breakdown of what’s coming – are you prepared?

Increased minimum wage

Minimum wage will increase from US$16.00 to US$16.50 for all employers regardless of size, effective January 1, 2025. 

This increase will also raise the minimum salary requirements for full-time exempt employees. Beginning January 1, 2025, the minimum salary for exempt employees will be US$68,640 (US$5,720 per month).

Notably, Proposition 32, a measure that would have further accelerated the pace of minimum wage increases in California, was rejected by voters in the November 2024 ballot. Therefore, the above raises will remain in place. 

For employers in the fast food industry, California Labor Code sections 1474 to 1476 continue to require that non-exempt hourly fast food restaurant employees be paid a minimum wage of US$20. 

Additionally, as of October 16, 2024, non-exempt hourly employees that work for certain health care facilities and provide health care services or support the provision of health care must be paid a higher minimum wage. The new minimum wage ranges from US$18 to US$23 per hour depending on the type of health care facility.  

Updates to leaves of absence

AB 2499

California law currently provides protections to employees from discrimination or retaliation for taking time off for jury duty or court appearances, and to employees who were victims of crime or abuse. AB 2499, which takes effect on January 1, 2024, will now expand those rights. 

The definition of “victims” will now include a victim of a “qualifying act of violence,” which means any of the following: domestic violence; sexual assault; stalking; or other acts, conduct or patterns of threats or violence, regardless of whether anyone is arrested for, prosecuted for or convicted of committing any crime. 

Employees will be permitted to use vacation, personal leave, paid sick leave or compensatory time off that is available, unless otherwise provided in a collective bargaining agreement. 

Additionally, jury and witness duty leave as well as crime victims’ leave will now be under the Fair Employment and Housing Act (FEHA), as opposed to the Labor Code, which means the California Civil Rights Department will now have enforcement authority. 

Employers will be required to provide notice of the rights implemented by AB 2499 to all employees annually, at any time upon request and any time the employer becomes newly aware that an employee or an employee’s family member is a victim. 

SB 1105

SB 1105 will expand paid sick leave provisions to allow agricultural workers to use accrued paid sick leave to avoid smoke, heat or flooding conditions created by a local or state emergency. 

AB 2123

AB 2123 eliminates employers’ ability to require employees to use up to two weeks of company-provided vacation before they start receiving paid family leave (PFL) insurance benefits paid by the state.

Discrimination, harassment and retaliation policies and practices

SB 399

SB 399 enacts the California Worker Freedom from Employer Intimidation Act. This new law prohibits employers from subjecting, or threatening to subject, an employee to discharge, discrimination, retaliation or any other adverse employment action because the employee declines to attend an employer-sponsored meeting, or affirmatively declines to participate in, receive or listen to communications with an employer or its agents or representatives regarding the employer’s opinion about religious or political matters, including labor organizations. An employer who is found to have violated this policy shall be subject to a civil penalty of US$500 per employee for each violation. 

SB 399 is likely to be challenged, but in the meantime, employers looking to hold employer-sponsored meetings regarding labor organizations should advise its employees that their attendance is not mandatory. 

SB 1100 

SB 1100 prohibits employers from including a statement that an applicant must have a driver’s license unless the employer reasonably expects driving to be one of the job functions of the position and reasonably believes that using an alternative form of transportation would not be comparable in travel time or cost to the employer. Alternative forms of transportation can include ride-hailing services, taxis, carpooling, bicycling and walking. 

Employers are advised to review their job postings and job descriptions to ensure compliance with SB 1100. 

SB 1137

SB 1137 amends the California FEHA to clarify that employers are prohibited from discrimination not just because of one protected trait but also because of a combination of two or more protected bases. 

Required poster and notice updates for the workplace

AB 1870

California Labor Code section 3550 already requires employers who are subject to the workers’ compensation system to post easily understandable notices in the workplace advising employees of their rights when they sustain a workplace-related injury. AB 1870 will now require those same notices to advise employees of their right to consult a licensed attorney to advise them of their rights under workers’ compensation laws. 

AB 2299

AB 2299 required the California Labor Commissioner to draft a model list of employee’s rights and responsibilities under existing whistleblower laws. Once published, it will be accessible on the DIR website under “Whistleblower protections” postings. 

Contracting with independent contractors

SB 988

SB 988 codifies the Freelance Worker Protection Act (FWPA). The FWPA establishes certain minimum requirements for contracts between hiring parties and freelance workers. 

Under the FWPA, “freelance workers” are defined as a person, or an organization composed of no more than one person, hired as an independent contractor to provide “professional services” valued at US$250 or more, either for one project or in aggregate for a series of projects over the preceding 120 days. 

“Professional services” is defined as including, but not limited to, marketing, administrators of human resources, graphic design, grant writers, graphic design, fine artists, photographers, photojournalists, writers or content contributors for publications such as educational, academic or instructional works.

Per the FWPA, contracts between hiring parties and freelance workers must be in writing and include, at minimum, the following information: (1) each party’s name and address; (2) an itemized list of services, their value and the rate and method of compensation; (3) the payment date or the mechanism by which the parties will determine the date; and (4) the date the services must be rendered to meet the hiring party’s internal processing deadlines for purposes of timely payment of compensation. The hiring party must provide this written contract to the freelance worker, and it must be retained for at least four years. 

Hiring parties must pay freelance workers the compensation specified in the written contract on or before the date specified by the contract, or if the contract does not specify a date, no later than 30 days after completion of the freelance worker services. 

The FWPA also prohibits discrimination against freelance workers for taking specified actions relating to enforcement of these provisions and will authorize an aggrieved freelance worker to bring a civil action to enforce the FWPA. 

Workplace safety developments in hospitals and future first aid kits

AB 2975

For hospitals, AB 2975 requires hospitals to implement new safety policies and protocols to prevent workplace violence. Hospitals must now use automatic security mechanisms, devices or technology designed to screen and identify instruments capable of inflicting death or serious bodily injury at three locations: the main public entrance; the entrance of the emergency department; and the entrance to labor and delivery, if separate. Hospitals must also assign personnel with certain training, other than healthcare providers, to monitor and operate these screening devices. Additionally, hospitals must adopt reasonable protocols addressing how it will respond if a dangerous weapon is detected and must post notices about its screening devices in conspicuous locations near entrances where the devices are used. 

AB 1976

AB 1976 will require OSHA to draft revised regulations to require first aid materials in a workplace to include naloxone hydrochloride (commonly known as “Narcan”), or another opioid antagonistic approved by the US FDA, and instructions for using the opioid antagonistic. The draft regulations will include instructions on how to store the opioid antagonistic. 

As a reminder, under existing law, any person who, in good faith and not for compensation (i.e. paid first responder), renders emergency treatment at the scene of the overdose or suspected overdose is not liable for civil damages that result from any act or omission related to the emergency treatment, except if the act or omission is grossly negligent or willful or wanton misconduct. 

Note AB 1976 requires the draft regulations to be submitted to the Standards Board by December 1, 2027, so no immediate changes will need to be made to existing workplace first aid kits. 

All employers with a California presence are encouraged to review their workplace practices, policies and handbooks, to bring them in compliance with the new laws set to commence on January 1, 2025. Questions about compliance can be directed to Debbie Birndorf-Zeiler, Natalie Lagunas and Jenny Choi.