New California Employment Laws Take Effect in 2023

January 4, 2023

California has introduced some significant and widely applicable new employment laws that took effect on Jan. 1, 2023, unless otherwise stated.

Minimum Wage Increases

On Jan. 1, 2023, the California state minimum wage increased to $15.50 per hour for all employers, regardless of size. Some cities and counties have even higher local minimum wage requirements.

At present, California has more than 35 cities and counties with their own minimum wage requirements, including but not limited to Los Angeles, Menlo Park, Oakland, San Francisco and South San Francisco, San Jose, San Diego and Santa Clara. In light of the significant number of varying requirements, employers should reevaluate any minimum wage requirements in the cities and counties where they have employees to ensure they do not run afoul of any requirements that may have changed in the new year.

Pay Transparency and Updated Reporting Requirements

Per SB 1162, as of Jan. 1, 2023, employers must provide the pay scale for a position to any job applicant, upon receipt of such request from the applicant. The amended Cal. Lab. Code § 432.3 also requires an employer that receives a request from an employee to provide the pay scale for the position in which the employee is currently employed. Additionally, any employer with 15 or more employees is now required to include the pay scale for any job posting. This requirement also extends to any third-party company hired by an employer to announce or publish an open position.

Furthermore, beginning May 10, 2023, each private employer with 100 or more employees must submit a pay data report to the California Civil Rights Department (formerly known as the California Department of Fair Employment and Housing) annually on the second Wednesday of May. The pay data reports must include the median and mean hourly rates for each combination of race, ethnicity and sex within each job category, and an employer with multiple establishments no longer will be required to submit a consolidated report. Finally, each employer with 100 or more employees hired through labor contractors has a new obligation to produce data on pay, hours worked, race/ethnicity and gender information in a separate report.

For details on these measures, and the potential penalties for failing to abide by them, see McGuireWoods’ Oct. 6, 2022, legal alert.

Bereavement Leave Now Must Be Provided

Effective Jan. 1, 2023, AB 1949 made changes to Sections 12945.21 and 19859.3 and added Section 12945.7 to the Government Code, making bereavement leave a protected leave of absence in California. Any employer with five or more employees must allow an employee to take up to five days of unpaid bereavement leave upon the death of the employee’s family member, defined as a spouse, child, parent, sibling, grandparent, grandchild, domestic partner or partner-in-law. To be eligible for bereavement leave, the employee must have been employed by the employer for at least 30 days prior to starting the leave, and the leave must be completed within three months of the family member’s death. Additionally, employers may require documentation to support the leave, such as a death certificate, a published obituary or other document verifying the death.

Enhanced Retaliation Protections Surrounding Emergency Conditions

Effective Jan. 1, 2023, SB 1044 added Section 1139 to the Labor Code, prohibiting employers from taking or threatening adverse action against an employee who refuses to report to or leaves a workplace due to his or her reasonable belief that the workplace is unsafe due to an “emergency condition.”

An employee’s belief is “reasonable” if a reasonable person would conclude that there is a real danger of death or serious injury if that person enters or remains on the premises.

An emergency condition is defined as either of the following:

  • Conditions of disaster or extreme peril to the safety of persons or property at the workplace or work site caused by natural forces or a criminal act.
  • An order to evacuate a workplace, a work site, a worker’s home or the school of the worker’s child, due to a natural disaster or a criminal act.

SB 1044 also made it unlawful for employers to prevent employees from using their mobile devices to seek emergency assistance, assess the safety of a situation, or communicate with a person to verify their safety in such an emergency condition.

Notably, a number of essential first-responder and emergency jobs are exempted from this law, including but not limited to disaster service workers, healthcare facility employees or contractors providing direct patient care, licensed residential care facility employees, and employees of companies that provide utility, communications, energy or roadside assistance when the employees are engaged in aiding in emergency responses. See Labor Code Section 1139(b)(1) for the complete list of exemptions.

California Extends COVID-19 Exposure Notice Requirements

AB 2693 amended and extended until Jan. 1, 2024, the statutory COVID-19 notice requirements (originally enacted under AB 685) in Labor Code Sections 6325 and 6409.6. Under prior law, an employer had to provide written notice of the potential exposure within one business day to all employees who were at the worksite. AB 2693 made a significant change to the notice requirements. Specifically, and in lieu of individual notice to employees, as of Jan. 1, 2023, employers instead may post a notice in the workplace for 15 days to alert employees to a potential COVID-19 exposure so long as the employer complies with the following requirements:

  • The notice must be displayed in areas where workplace rules or regulations for employees are customarily posted, including on any employee portal used for workplace notices.
  • The notice must be posted within one business day from when the employer is notified of a potential COVID-19 exposure and must remain posted for at least 15 calendar days.
  • The notice must include (a) the dates on which an employee, or employee of a subcontracted employer, with a confirmed case of COVID-19 was on the worksite premises within the infectious period; (b) the location of the exposures, including the department, floor, building or other area; (c) contact information for employees to receive information regarding COVID-19-related benefits to which the employee may be entitled under applicable federal, state or local laws, as well as anti-retaliation and anti-discrimination protections of the employee; and (d) contact information for employees to receive the cleaning and disinfection plan the employer is implementing. 

Additionally, the employer must keep a log of the dates in which the notice(s) were posted at each worksite and must allow the Labor Commissioner to access such records upon request.

California Expands California Family Rights Act Leave

Under the California Family Rights Act (CFRA), an employer with five or more employees must provide eligible employees with up to 12 workweeks of unpaid family care and/or medical leave in any 12-month period.

Effective Jan. 1, 2023, AB 1041 amended Section 12945.2 of the Government Code, expanding the class of people for whom an employee may take family care leave under the CFRA to include a “designated person.” A designated person is defined as any individual related by blood or whose association with the employee is the equivalent of a family relationship. An employee does not have to pre-identify his or her designated person and may identify the person at the time of the leave request. However, the employer may limit the employee to one designated person per 12-month period.

AB 1041 similarly amended California’s paid sick leave law, with Labor Code Section 245.5 now allowing sick leave to be used for a “designated person” subject to the same terms and conditions that now apply to CFRA.

Contraceptive Equity Act of 2022

Effective Jan. 1, 2023, SB 523 made it unlawful for an employer to require applicants or employees to disclose information relating to reproductive health decision-making, or to discriminate against an applicant or an employee based on reproductive health decision-making.

“Reproductive health decision-making” includes but is not limited to “a decision to use or access a particular drug, device, product, or medical service for reproductive health.” Reproductive decision-making also may be construed to fall under the definition of “sex” in the Fair Employment and Housing Act.

SB 523 amended a number of code provisions, including the California Government Code, to require most health benefit plans or contracts to provide coverage for contraceptives, vasectomies and related services consistent with various requirements of the Health and Safety Code and Insurance Code beginning on Jan. 1, 2024.

New Off-Duty Cannabis Discrimination Prohibitions to Take Effect Jan. 1, 2024

Although it does not become effective until Jan. 1, 2024, AB 2188 added Section 12954 to the Government Code to make it unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalize a person, based upon either (1) the person’s use of cannabis off the job and away from the workplace; or (2) an employer-required drug screening test that found nonpsychoactive cannabis metabolites in the person’s hair, blood, urine or other bodily fluids.

Notably, AB 2188 does not prohibit an employer from discriminating based on a test that does not screen for nonpsychoactive cannabis metabolites. The new law also will exempt certain applications and employees in building and construction trades and those requiring federal background investigation or clearance.

Importantly, the law does not permit or excuse an employee’s possession, use or impairment by cannabis while on the job, and it maintains employers’ rights and obligations in keeping the workplace drug- and alcohol-free. Since the law does not take effect for another year, employers have some time to prepare for these changes in how they must treat employees and applicants who use cannabis off the job and away from the workplace.