California passed several key pieces of legislation prior to the close of its’ legislative year (September 30, 2022). There is some employment-related legislation that will impact California employers throughout the end of the year or beginning in 2023 which are outlined in this post.
Updated Salary Level and Hourly Rates for Overtime Exempt Computer Professionals and Physicians and Surgeons
Effective January 1, 2023, the minimum pay, for overtime-exempt computer professionals and physicians and surgeons paid an hourly rate in California increases under an annual inflation adjustment required by the state statute.
- The minimum annual salary for computer professionals paid on a salary basis increases from $104,149.81 to $112,065.20.
- The minimum hourly rate of pay for computer professionals paid an hourly rate increase from $50.00 to $53.80.
Physicians and Surgeons
- The minimum hourly rate of pay for physicians and surgeons paid an hourly rate increase from $91.07 to $97.99.
It should be noted that the California test for computer professionals differs from the federal regulations under the Fair Labor Standards Act (FSLA) and may require additional standards to be met before an employer may claim this exemption.
As we previously reported, employers should also note that the salary level for other types of overtime exemptions has been accelerated due to minimum wage increases triggered by inflation.
Limited Use of Vehicle Tracking Permitted
Effective January 1, 2023, California’s motor vehicle laws are amended (CA A.B. 984) to permit the Department of Motor Vehicles (DMV) to authorize alternatives to stickers, tabs, license plates and registration cards as vehicle tracking devices.
However, the amended law prohibits an employer from using an alternative device to monitor employees, except during work hours and only if strictly necessary for the performance of the employee’s duties. Employees are permitted to disable or remove the alternative device’s monitoring capabilities, including vehicle location technology, outside of work hours.
The amended law also includes anti-retaliation protections for employees who remove or disable an alternative device’s monitoring capabilities, and an employer notice requirement which must state that monitoring will occur before conducting any monitoring with an alternative device. Failure to comply with the law’s notice requirement may result in penalties ranging from $250.00 to $1000.00 per employee, per violation and per day.
Reporting Requirements for Potential COVID-19 Exposure Extended and Revised
California extended and amended its notice and reporting requirements for potential COVID-19 exposure, which took effect January 1, 2021 and was due to expire on January 1, 2023. The requirement for employers to notify employees of a potential exposure to COVID-19 has been amended and extended to January 1, 2024.
Employers must provide written notices to employees and employers of subcontracted employees who are on the premises at the same time as a confirmed COVID-19 case during their infectious period. Beginning January 1, 2023, employers must prominently display the notice in the workplace wherever notices regarding workplace rules or regulations are customarily posted. The notices must be posted within one business day of receiving notice of the positive case, remain posted for at least 15 days, and include:
- The dates and locations of confirmed COVID-19 cases at the worksite;
- Contact information for employees to receive information about COVID-19-related benefits to which the employee may be entitled; and
- Contact information for employees to receive the cleaning and disinfection plan that the employer will implement according to CDC and Cal/OSHA guidelines.
Alternatively, employers may continue to provide direct written notice to all employees and to the employers of subcontracted employees who were on the premises at the same worksite as a confirmed case of COVID-19 within the infectious period.
Employers must also keep a log of the dates that any such notices were posted.
Additionally, the requirement that employers conspicuously post notice in the workplace if Cal/OSHA suspends operations or restricts access to a worksite due to COVID-19 exposure is extended to January 1, 2024. However, reporting of outbreaks to local health departments will no longer be required.
Employers Prohibited From Retaliating Against Employees for Refusal to Report to Work During Emergency Conditions
On September 29, 2022, Governor Newsom signed Senate Bill (SB) 1044 (the bill), which prohibits an employer in the event of an emergency condition from taking or threatening adverse action against any employee for refusing to report to, or leave a workplace or worksite within the affected areas because the employee has a reasonable belief that the workplace or worksite is unsafe. The law takes effect on January 1, 2023.
The bill also prohibits an employer from preventing any employee, including employees of public entities from accessing the employee’s mobile device or other communications device for seeking emergency assistance, assessing the safety of the situation, or communicating with a person to confirm their safety.
The bill requires an employee to notify the employer of the emergency condition requiring the employee to leave or refuse to report to the workplace or worksite. The bill clarifies that these provisions are not intended to apply when emergency conditions that pose an imminent and ongoing risk of harm to the workplace, the worksite, the worker, or the worker’s home have ceased.
The bill defines an “emergency condition” as either of the following:
- Conditions of disaster or extreme peril to the safety of persons or property caused by natural forces or a criminal act; or
- An order to evacuate a workplace, worksite, or worker’s home, or the school of a worker’s child due to a natural disaster or a criminal act.
The bill specifies that an emergency condition does not include a health pandemic.
A “reasonable belief” that the workplace or worksite is unsafe means that a reasonable person, under the circumstances known to the employee at the time, would conclude there is a real danger of death or serious injury if that person enters or remains on the premises. The existence of any health and safety regulations specific to the emergency condition and an employer’s compliance or non-compliance with those regulations shall be a relevant factor if this information is known to the employee at the time of the emergency condition or if the employee received training on the health and safety regulations mandated by law specific to the emergency condition.
The bill does not apply to certain types of workers including, but not limited to, first responders; disaster service workers; employees of depository institutions; employees or contractors of a health care facility who provides direct patient care and provides services supporting patient care operations during an emergency or is required by law or policy to participate in emergency response or evacuation; and utility, communications, energy, or roadside assistance workers while the employee is actively engaged in or is being called upon to aid in emergency response.
Fair Employment and Housing Act Expanded to Include Reproductive Health Decision-Making
On September 27, 2022, Governor Newsom signed SB 523 (the bill), the “Contraceptive Equity Act of 2022”, which amends the California Fair Employment and Housing Act (FEHA) concerning “reproductive health decision-making.” The law takes effect on January 1, 2023.
The bill makes it an unlawful employment practice to discriminate against an applicant or an employee based on reproductive health decision-making; it also makes it unlawful for an employer to require, as a condition of employment, continued employment, or a benefit of employment that applicants or employees to disclose information relating to 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 FEHA.
In addition to the changes to the FEHA, the bill amends the California Government Code to require that most health benefit plans, or contracts provide coverage without cost sharing for contraceptives and related services such as voluntary tubal ligation and vasectomy. However, these provisions do not take effect until sometime in 2024.
This amendment will require employers to review and update their equal employment and non-discrimination and non-harassment policies to include this new protected class. Ahead of 2024, employers may wish to review their benefits coverage to ensure their health plan will be positioned to meet the law’s reproductive health coverage requirements.
Increased Paid Family Leave (PFL) Benefits
On September 30, 2022, California Governor Newsom signed a new law (SB 951 or “the bill”) which provides increased benefits for workers taking paid family leave. The bill is aimed at increasing the earnings that low-wage workers receive while on family leave, so that three years from now, workers would receive up to 90 percent of their pay.
The existing California Paid Family Leave (PFL) law provides benefit payments for people who need to take time off work to:
- Care for a seriously ill family member;
- Bond with a new child; or
- Participate in a qualifying event because of a family member’s military deployment.
Currently, wage replacement benefits are 70 percent of average weekly wages for workers making $27,000 or less and 60 percent for everyone else. The bill extends the current wage replacement rates, which were set to expire at the conclusion of 2022, through 2023 and 2024. Workers claiming the benefit can receive paid leave for up to eight weeks. The bill also increases the benefits to 90 percent of average weekly wages for low wage workers beginning in 2025. Other workers will receive 70 percent up to a cap, currently $1,539/week, which will be adjusted each year based on average statewide wages.
Paid Family Leave is currently funded by employees via a 1.1 percent tax on their wages. The bill will pay for the increased benefits via increased contributions on payroll taxes for employees earning above $145,600. The increases do not require any additional employer contributions as they are funded entirely by the increased payroll taxes.
Covered Family Members Expanded Under the California Family Rights Act and the Healthy Workplaces Healthy Families Act
On September 29, 2022, Governor Newsom signed Assembly Bill (AB) 1041, which expands the definition of a “family member” under the California Family Rights Act (CFRA) and California’s Healthy Workplaces Healthy Families Act (HWHFA) to include a “designated person.” The amendments take effect on January 1, 2023.
Under both the amended CFRA and HWHFA, employees will be able to identify a “designated person” for whom they want to use leave when they request CFRA or paid sick leave under the HWHFA. Under both amended laws, employers will be able to limit an employee to one designated person per 12-month period.
The definition of “designated person” under each of these laws differs slightly. Under CFRA, a “designated person” is “any individual related by blood or whose association with the employee is the equivalent of a family relationship.” However, under the HWHFA, a designated person is “a person identified by the employee at the time the employee requests paid sick days”; of note, the individual need not be related by blood to the employee, and their association need not be the equivalent of a family relationship.
Permitting employees to “designate a person” may affect how employers comply with other federal, state and/or local leave laws such as the federal Family and Medical Leave Act (FMLA), as the variation in covered family members under these laws may not always allow leave to run concurrently. In addition, an employee’s ability to collect wage replacement benefits under the Paid Family Leave (PFL) program may also be impacted as a “designated person” is not a covered family member under PFL.
Employers will need to review and update their CFRA and Paid Sick Leave policies and procedures to comply the new designated-person standards. Employers should also monitor the state’s Civil Rights Department (formerly the Department of Fair Employment and Housing) and Labor Commissioner websites for the release of additional guidance on these amendments.
Employers can get an overview of CFRA on the CA Civil Rights Department website. Additional information on the state’s paid sick leave law (HWHFA) is available from the Department of Industrial Relations’ website.
California Privacy Rights Act (CPRA) Becomes Applicable to Employers
Effective January 1, 2023, the California Consumer Privacy Act (CPRA) becomes fully operative as the employment exemptions that were previously in place have been allowed to expire. The law will now also apply to human resources data. This means that California-resident employees, applicants, emergency contacts, beneficiaries, independent contractors and members of boards of directors (collectively, “employees”) have the same rights as any other consumers as it relates to their individually identifiable information.
The CPRA applies to employers that are:
- For-profit companies;
- Doing business in California; and
- Collecting the personal information of California residents; in addition to,
- Meeting certain size thresholds (i.e., gross annual revenue of over $25 million or those who buy, sell, or share the personal information of 100,000 people or households).
Key provisions of the law require employers to:
- Comply with new rights regarding human resources data, including employee’s rights to request that employers delete or correct information and providing a copy of specific pieces of personal information; and
- Include specific CPRA provisions in contracts with vendors that handle human resources data.
To comply with the law, employers will need to identify all the types of human resources data they collect, how this data is handled and where said data is stored. Employers may need to review and adjust existing policies, procedures and practices for handling human resource related personal information. Because the law contains numerous provisions, it is recommended that employers seek the assistance of their legal counsel to determine all of their compliance obligations.