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Out With the Old, In With the New: Employment Law Updates in 2023

With 2023 here, it’s time for employers to comply with new California labor laws. Below is a highlight reel of these changes.

What’s in a Name? Turns Out, Not Much: The Department of Fair Employment and Housing is Renamed the Civil Rights Department

Effective July 1, 2022, the California Department of Fair Employment and Housing (DFEH) was renamed the California Civil Rights Department (CRD). The CRD has the same existing powers and authorities as the DFEH, which include investigation of discrimination by employers or businesses, human trafficking, and sexual harassment in business, service or professional relationships. The purported purpose of the rename was to more fully capture the services that the department provides. The primary impact of the change is that the Department’s website URL changed and it is releasing new posters and forms under its new name. Practically, employers should update references to the DFEH in handbooks and other documents to refer to the CRD.

#FluSeason: AB1041 Changes California Paid Sick Leave and Family Rights Act

In time for the resurgence of COVID, flu, RSV, and all the other transmissible diseases out there these days now, California paid sick leave and family leave cover more than just caring for yourself or a family member.

Existing Law

Since 2015, California Paid Sick Leave provides three days or 24 hours of paid sick leave to California employees who have worked for an employer in California for 30 days or more. However, some city ordinances require employers to offer more sick leave than allotted under state law (i.e., Los Angeles, where employees receive 48 hours, and Santa Monica, where employees can earn up to 40 or 72 hours of paid sick time, depending on the company’s size). Under existing law, paid sick leave is available for the diagnosis, care, or treatment of an existing health condition, or preventive care, for themselves or a “family member.”

Changes to CFRA and PSL

Effective January 1, 2023, AB 1041 expanded the California Paid Sick Leave (“PSL”) and California Family Rights Act (“CFRA”) to cover care for any “designated person” in addition to a family member. Previously, PSL and CFRA only applied to the care of a child, parent or parent-in-law, spouse or registered domestic partner, grandparent, or grandchild. The new amendment to the CFRA adds a “designated person,” which for purposes of CFRA, is defined as “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” For purposes of PSL, it is defined as “a person identified by the employee at the time the employee requests paid sick days.” Under both laws, employers can limit an employee to one designated person per 12-month period.

Hey Siri, Define “Emergency”: SB 1044 Prohibits Retaliation During Emergency Conditions

Effective January 1, 2023, employers may not take or threaten adverse action against employees for refusing to go to work or leave a workplace due to a reasonable belief that the workplace is unsafe due to an “emergency condition.”

A “reasonable belief” exists when a reasonable person would conclude there is a real danger of death or serious injury if they enter or remain at the workplace. This can be assessed based on whether if, at the time of the emergency condition, the employee knew about the existence of any health or safety regulations specific to the emergency condition and about the employer’s compliance or noncompliance with those regulations.

An “emergency condition” is defined as “conditions 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 an order to evacuate a workplace, a worksite, a worker’s home, or the school of the worker’s child due to natural disaster or a criminal act. Notably, the law does not apply to a health pandemic. If it is feasible, an employee is required to notify their employer of the emergency condition prior to leaving or refusing to report to the workplace.

SB 1044 also makes it unlawful for employers to prevent employees from using their mobile devices to seek emergency assistance, assess the safety of the situation, or communicate with a person to verify their safety during the emergency condition. Employers should check their policies regarding cell phone usage to make sure they do not violate this new law.

Death of a Relative: AB 1949 Creates New Bereavement Leave Requirements

AB 1949 requires all private sector employers with five or more employees to provide eligible employees with up to five days of bereavement leave upon the death of a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. To be eligible for this bereavement leave, the person must be employed for at least 30 days prior to the start of the leave.

Employers do not have to pay for the bereavement leave and may not require that bereavement leave days be taken consecutively. Employers may require documentation supporting the leave within 30 days of the first day of leave and that the leave is used within three months of a family member’s death.

Employers will now also be required to maintain confidentiality of any employee’s request for bereavement leave and may not interfere with or retaliate against an employee who seeks leave under this law or who testifies regarding another person’s bereavement leave.

When an employee requests an immediate right to sue a small employer (5 to 19 employees) alleging a violation of this statute, there may be a requirement to participate in a mediation pilot program if requested by either the employee or employer.

Show Me the Money: SB 1162 Adds Increased Pay Transparency and Pay Data Reporting

Existing Law

SB 1162 expands California employers’ obligations under two statutes. Currently, California Labor Code Section 432.3 requires disclosure of certain pay information to job applicants. Employers must disclose a position’s pay scale upon “reasonable request,” which is defined as a request made after an applicant has completed an initial interview.

California Government Code Section 12999 presently mandates that private employers with 100+ employees who are required to submit an annual Employment Information Report (EEO–1) to the federal Equal Employment Opportunity Commission must submit a pay data report to the California Civil Rights Department (the CRD, formerly known as the DFEH) on or before March 31 each year. Existing law permits California employers to satisfy this reporting requirement by submitting a copy of the EEO-1 or a document containing substantially similar pay data.

Changes to Labor Code Section 432.3

Beginning January 1, 2023, California Labor Code Section 432.3 will continue to require California employers to provide job applicants with the pay scale for a position upon reasonable request. Pay scale is defined as a salary or hourly wage range that the employer reasonably expects to pay for the position; however, the law does not provide a definition of “reasonably expects.” Applicant is defined as an individual who is seeking employment with the employer and is not currently employed with that employer in any capacity or position. The definition of a “reasonable request” has been amended and no longer requires applicants to have completed an initial interview.

SB 1162’s amendments to California Labor Code Section 432.3 also add disclosure requirements with respect to current employees, who must be provided the pay scale for the position in which the employee is currently employed upon request. Finally, the expanded law will require California employers with 15 or more employees to include a pay scale in all job postings. This applies to all jobs that can be filled by a California resident, including internal job postings and postings by third parties on the employer’s behalf.

The California Labor Commissioner interprets the job posting requirement to mean that the pay scale must be included for any position that may ever be filled in California, either in-person or remotely. The pay scale must be included within the job posting, not provided via hyperlink or QR Code. The pay scale does not need to include bonuses, tips or other benefits. For purposes of determining whether an employer meets the requisite fifteen-employee threshold, all workers other than bona fide independent contractors are counted, including part-time employees, at least one of which must be currently located in California.

As well as addressing transparency in pay, the amended California Labor Code Section 432.3 will require employers to retain employees’ job title and wage history records for the duration of their employment plus three years. The records will need to be open for inspection by the California Labor Commissioner. Failing to keep required records creates a rebuttable presumption in favor of an employee’s claim of a violation of the statute.

SB 1162 also creates additional remedies for violations of California Labor Code Section 432.3. The Division of Labor Standards Enforcement may assess a civil penalty between $100 and $10,000 per violation. However, there is no penalty for a first violation upon an employer’s proof of an updated job posting.

Changes to Government Code Section 12999

SB 1162 also amends California Government Code Section 12999 to require all private employers with 100+ employees to submit a pay data report to the CRD by the second Wednesday of May each year, beginning May 10, 2023. Employers with at least one California employee (of the 100+) must comply. Covered employers will no longer be able to submit an EEO-1 report in lieu of the required pay data report.

In addition to currently required counts of employees by race, ethnicity and sex in specified job categories, the new pay data report must also include median and mean hourly rates for each combination of race, ethnicity, and sex within each category, as well as a “snapshot” of individuals during a single pay period of the employer’s choice between October 1 and December 31 of the prior calendar year. Pay data reports must be made available in a format that allows the CRD to search and sort the information using readily available software. Separate reports are required from businesses with 100 or more employees staffed through labor contractors.

Under the revised statute, a court can impose a civil penalty of up to $100 per employee on any employer who fails to file a required report, and a civil penalty of up to $200 per employee for any subsequent violation.

Employer Drug Tests Go Up in Smoke: AB 2188 Prohibits Discrimination Based on Off-Duty Cannabis Use

Under AB 2188, employers may not discriminate against employees or applicants based on off-duty cannabis use. This applies to all employment contexts except as to those employers in the building and construction industry, positions requiring federal background clearance or investigation, and employers receiving federal funding, federal licensing-related benefits, or subject to federal contracts and required to follow federal laws. However, this law does not prohibit drug testing for cannabis while employees are on the job. Employers should update policies, testing facility contracts, and supervisor training accordingly.

A New Protected Class: SB 523 Prevents Discrimination Based on Reproductive Health Decision-making

All employers with five or more employees must comply with SB 523, the Reproductive Equity Act. This law is multifaceted and relates to many aspects of employment. Significantly, it makes it unlawful to discriminate and harass an applicant or employee based on their 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. Employers should consider adding this as a protected class to their policies and handbooks.

How Close is Too Close? New Definitions of Close Contact in the Updated COVID-19 Notice Requirements

As a reminder, employers are obligated under Cal/OSHA Emergency Temporary Standard (ETS) to provide notice to employees of COVID cases in the workplace, including a general notice to the worksite of the COVID case, and individualized notices to those exposed to COVID as a close contact.

In mid-October and effective immediately, the California Department of Public Health changed the definition of “close contact.” Close contact means: in indoor spaces that are 400,000 or fewer cubic feet per floor (such as home, clinic waiting room, airplane, etc.), a close contact is sharing the same indoor air space for a total of 15 minutes or more over a 24-hour period during an infected person’s high-risk infectious period. In large indoor spaces greater than 400,000 cubic feet per floor (such as open-floor-plan offices, warehouses, large retail stores, manufacturing, or food processing facilities), close contact is defined as being within six feet of the infected person for a total of 15 minutes or more over a 24-hour period during the infected person’s high-risk infectious period. Spaces that are separated by floor-to-ceiling walls (e.g., offices, suites, rooms, waiting areas, bathrooms, or break or eating areas that are separated by floor-to-ceiling walls) must be considered distinct indoor airspaces. The high-risk infectious period is when they have been confirmed by a COVID-19 test or a clinical diagnosis. This change impacts who may be deemed an exposed individual due to close contact with a COVID case in the workplace.

Effective January 1, 2023, employers can satisfy the obligation to provide general notice to all employees of a COVID case at the worksite in the form of a notice poster. The new regulations require employers to “prominently display” the notice in “all places where notices concerning workplace rules or regulations are customarily posted.” Most commonly this will be break or lunch rooms. The notice poster must include dates on which the COVID case was at the worksite and the location of exposure, and it must be displayed for 15 days. The notice requirements have been extended through January 1, 2024. However, employers are no longer required to notify the local health agency of COVID cases in the workplace.

Employees, Contractors, and Applicants Now Have Rights Under CCPA

Personnel and applicants now enjoy ‘consumer’ rights under the California Consumer Privacy Act (“CCPA”), thanks to the sunset of a provision excluding them. A 2020 ballet initiative also goes into effect Jan. 1, 2023. The voter-approved California Privacy Rights Act (“CPRA”) amends and broadens CCPA (but doesn’t change its name!).

To learn more about the CCPA and the CPRA, please attend a webinar on January 23, 2023 at 10:00 a.m. PST, hosted by Tim Toohey and Peter Jackson from Greenberg Glusker’s Cybersecurity and Privacy Group. Registration for the webinar is available here.

Tim and Peter will also be publishing an article on the topic soon, which will be available on The Laboring Oar blog.