Review of California’s 2022 Legislative Session and New Employment Laws
California’s 2022 legislative session concluded at the end of September, and Governor Newsom approved a number of employment-related bills, most of which will impose new obligations on California employers starting on January 1, 2023. California employers, including out-of-state companies with California employees, should take steps to become familiar with the new requirements and to make any necessary changes to ensure compliance. Outlined below is an overview of several of those new laws:
Pay Transparency (SB 1162)
Senate Bill 1162 has two primary components, both designed to advance pay and gender equality in California. The obligations highlighted below begin on January 1, 2023.
Pay Scale Disclosure
- Employers will be required, upon a request from an employee, to provide pay scale information for that employee’s current position.
- Employers with at least 15 employees must include the pay scale for any job posting. This pay scale requirement also applies to any posting advertised by third-parties on behalf of the employer.
- Employers must maintain job-title and wage-rate-history for every employee, not only for the duration of employment, but also for three years thereafter.
- An aggrieved employee may file a complaint with California’s Division of Labor Standards Enforcement or a civil action. Following an investigation, the DLSE has the authority to assess civil penalties, which can range from $100 to $10,000 per violation.
Pay Data Reporting
Employers with 100 or more employees will also be responsible for additional reporting requirements. By the second Wednesday in May (this coming year is May 10, 2023), these employers must submit an annual pay-data report to California’s Civil Rights Department, now including the median and mean hourly rate for each combination of race, ethnicity, and sex for specified job categories. Furthermore, the previously used Employment Information Report (EEO-1) will no longer be accepted in place of the pay-data report.
Notably, SB 1162 offers little guidance for out-of-state employers with California employees, although compliance issues related to non-California employers with remote workers may eventually be addressed directly by the California Civil Rights Department.
Bereavement Leave (AB 1949)
Beginning on January 1, 2023, employers with five or more employees must provide eligible employees up to five days of unpaid bereavement upon the death of a family member. Employees who have worked for the employer for at least 30 days are eligible for leave, which must be taken within three months of the death.
Family Leave for “Designated Persons” (AB 1041)
The legislature amended and expanded the California Family Rights Act. Starting on January 1, 2023, employees may take job-protected leave to care for a “designated person,” including non-family members. Under the CFRA, a designated person will mean any individual related by blood or whose association with the employee is the equivalent of a family relationship. The employer will be able to limit an employee to one designated person per twelve-month period.
“Emergency Conditions” Leave (SB 1044)
Starting on January 1, 2023, employers will be prohibited from taking or threatening to take adverse action against an employee who refuses to report for, or leaves work because he or she feels unsafe due to an “emergency condition.” In turn, “emergency condition” is defined as either (a) “[c]onditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act”; or (ii) “[a]n order to evacuate a workplace, a worksite, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act.” SB 1044, however, specifically excludes “a health pandemic” from the definition of “emergency condition.”
Off-Duty Cannabis Use (AB 2188)
Beginning on January 1, 2024, California statute will prohibit employers from discriminating against employees and job applicants for a person’s use of cannabis off the job and away from the workplace. AB 2188 will also make it unlawful for an employer – with some exceptions – to discriminate based upon the results of a required drug screening test that detects “nonpsychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.” However, nothing in AB 2188 prohibits employers from maintaining a drug and alcohol-free workplace, and the legislation does not affect an employer’s rights or obligations under federal law or regulation.
Changes to Paid Family Leave Formula (SB 951)
On January 1, 2025, the formulas for calculating paid family leave and state disability insurance benefits will change, increasing the wage-replacement rate for lower income workers. These benefits are paid by the state, and workers earning less than the state’s average wage will be eligible to receive up to 90% of their regular wages while on leave.
California’s employment law landscape is always changing, and 2023 will be no different. Employers should review their policies and procedures, to ensure compliance with these new laws.