California Employment Law: Legislative Update

Below is a summary of updates and several prominent bills signed by Governor Gavin Newsom this legislative season.

Minimum Wage Update

Starting January 1, 2025, the minimum wage in California for all employees will be $16.50 per hour (unless Proposition No. 32 passes – see below).

As of now, other local jurisdictions set their own (higher) minimum rates. For example:

• Los Angeles City: $17.28/hr (as of July 1, 2024)
• Los Angeles County (unincorporated areas): $17.27/hr (as of July 1, 2024)
• Santa Monica: $17.27/hr (as of July 1, 2024)
• San Francisco: $18.67/hr (as of July 1, 2024)
• South San Francisco: $17.25/hr (as of January 1, 2024)
• San Jose: $17.55/r (as of January 1, 2024)
• Mountain View: $18.75/hr (as of January 1, 2024)

Note the applicable rate is determined based on the employee’s location (i.e., where the work is being performed).

Further, certain industries may have their own minimum rates (e.g., fast food and certain healthcare workers) that exceed the State’s minimum wage.

The increase in the State’s minimum wage also raises the minimum salary threshold for exempt employees:

• $68,640 annually;
• $5,720 monthly;
• $1,320 weekly

Proposition No. 32

This upcoming election season, California voters will decide whether or not to increase the State’s minimum wage to $18/hour.

Proposition No. 32 proposes a gradual increase in minimum wage based on the employer’s size:

	Employers with 26 or more employees	Employers with 25 or fewer employees
Remainder of 2024	$17/hr	$16/hr (current minimum wage)
January 1, 2025	$18/hr	$17/hr
January 1, 2026	$18/hr	$18/hr

Thereafter, the minimum wage will be adjusted for inflation.

 

Senate Bill 1100: Limitations on Requiring a Driver’s License as a Requirement of the Job

Generally, the Fair Employment and Housing Act protects “the right and opportunity of all persons to seek, obtain, and hold, employment.” In part, FEHA (Government Code Section 12940) prohibits employers from refusing to hire individuals based on protected characteristics like race, religion, national origin, physical/mental disability, reproductive health decision making, etc.

Senate Bill 1100 amends Section 12940 to also prohibit employers from requiring applicants for employment to have a driver’s license, unless:

(A) The employer reasonably expects driving to be one of the job functions for the position, and

(B) The employer reasonably believes that satisfying the job function using an alternative form of transportation (e.g., Uber/Lyft, taxi, carpooling, bicycling, or walking) would not be comparable in travel time or cost to the employer.

The legislature believes this prohibition “will encourage employers to focus on relevant job qualifications and skills when making hiring decisions” and will promote “inclusive hiring practices that consider a larger, more diverse pool of candidates and values individuals for their abilities rather than arbitrary criteria unrelated to job performance.”

 

Assembly Bill 2499: FEHA Protections for Jury Duty Service and Time Off Due to Qualifying Acts of Violence  

Existing law prohibits employers from discriminating against employees for taking time off to serve on jury duty and/or because of an employee’s status as victim of crime or abuse, per California Labor Code Section 230. Employers are also required to reasonably accommodate employees who are victims of domestic violence, sexual assault, or stalking by implementing safety measures, changing work telephone/station, assisting in documenting the abuse, etc.

Employees who work for employers with 25 or more employees, and are victims of crime or abuse, are also entitled to take time off to obtain treatment, assistance from a shelter/crisis center, counseling, etc. (Labor Code Section 230.1).

 Assembly Bill 2499 moves the above protections from the Labor Code, which is generally subject to the enforcement of the Labor Commissioner, to FEHA as new Government Code Section 12945.8 – which is generally subject to the enforcement by the California Civil Rights Department.

Further, AB 2499 expands the reasons for which covered employees, who work for employers with +25 employees, may take time off:

First, employees may now take time off to assist a “family member who is a victim.”

Second, while Labor Code Section 230 allowed employees to take time off for crime or abuse, AB 2499 also permits time off for qualifying acts of violence, regardless of whether anyone “is arrested for, prosecuted for, or convicted of committing any crime”:

(A) Domestic violence.

(B) Sexual assault.

(C) Stalking.

(D) An act, conduct, or pattern of conduct that includes any of the following:

(i) In which an individual causes bodily injury or death to another individual.

(ii) In which an individual exhibits, draws, brandishes, or uses a firearm, or other dangerous weapon, with respect to another individual.

(iii) In which an individual uses, or makes a reasonably perceived or actual threat to use, force against another individual to cause physical injury or death.

Employees may use any paid time available to them, including paid sick leave. The bill amends Labor Code Section 246.5 accordingly. Covered employers may limit the time off to up to 12 weeks, which may be counted against the Family and Medical Leave Act and/or the California Family Rights Act. Time off may also be required as reasonable accommodation.

Employers must provide written notice of employee rights under AB 2499 on hire, annually, on request, or when an employee informs the employer the employee or their family member is a victim. The CRD will develop a model notice on or before July 2025.

 

Senate Bill 1340: Enforcement of FEHA by Local Entities

Generally, before an individual can pursue a FEHA claim in court, they must first exhaust administrative remedies with the CRD. The CRD may investigate, file a lawsuit, or issue a right-to-sue notice which then allows an individual to file a lawsuit.

Per the author, limiting enforcement of FEHA to the CRD limits enforcement of anti-discrimination law. Therefore, SB 1340 specifies that if certain conditions are met, any city/county, or other political subdivision of the state may also enforce local law prohibiting employment discrimination against “classes of persons” covered by FEHA.

This, per the author of SB 1340, will “allow local agencies to build on the state’s capacity and ensure that thousands of workers will be able to have their cases reviewed by a member of their community who has a better understanding of their experiences. This … will permit more rigorous and robust antidiscrimination enforcement across the state of California.”

 

Senate Bill 1137: FEHA Protection for Combination of Protected Characteristics

As noted above, FEHA prohibits discrimination in employment on the basis of a person’s actual or perceived race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or military and veteran status, etc. (Government Code Section 12920 et seq.)

Senate Bill 1137 aims to clarify that employees and applicants are also protected from discrimination based on any combination of those protected characteristics. Per the author, this change will “allow plaintiffs who have experienced overlapping forms of discrimination to more successfully pursue justice and ensure that the application of our anti-discrimination laws is consistent with legislative intent.”

 

Senate Bill 399: Prohibitions on Employer Sponsored Meetings

Existing law prohibits employers from acting against employees based on their political beliefs and activities (Labor Code Sections 1101-1102).

Senate Bill 399, which created the “California Worker Freedom from Employer Intimidation Act” (Labor Code Section 1137), will also prohibit employers (with some limited exceptions) from requiring employees to attend meetings or receive or listen to any communication about the employer’s opinions about “religious or political matters.”

The bill defines “Political matters” as “matters relating to elections for political office, political parties, legislation, regulation, and the decision to join or support any political party or political or labor organization.”

Senate Bill 399 defines “Religious matters” as “matters relating to religious affiliation and practice and the decision to join or support any religious organization or association.”

Violation of SB 399 may result in a civil penalty of $500 per employee per violation, in addition to any other remedy.

 

Senate Bill 988: Required Written Contracts and Timely Payment to Independent Contractors

Last year, Los Angeles City passed the Freelance Worker Protections Ordinance, which requires certain engagements with independent contractors performing services within the City to be specified in writing and include information such as the rate of compensation and the date of payment.

SB 988 created the Freelance Worker Protection Act (Business and Professions Code Sections 18100-18107), which provides similar protections to covered independent contractors in California.

Under the new statute, starting January 1, 2025, a contract between a “hiring party” (a person or organization in the State of California), and a “freelance worker” (an individual providing services in exchange for a fee of $250 or more), must be in writing and include, at minimum, the following information:

(1) The name and mailing address of each party.

(2) An itemized list of all services to be provided by the freelance worker, including the value of those services and the rate and method of compensation.

(3) The date on which the hiring party shall pay the contracted compensation or the mechanism by which the date shall be determined.

(4) The date by which a freelance worker shall submit a list of services rendered under the contract to the hiring party to meet the hiring party’s internal processing deadlines for purposes of timely payment of compensation.

The requirements of SB 988 only apply to independent contractors that provide “professional services,” as defined in Labor Code Section 2778(b)(2), like marketing, human resources, travel agent, graphic design, grant writer, fine artist, photographer, writer, etc.

Excluded from the definition of a “hiring entity” is the federal, state, and foreign governments and an individual who is hiring the services for the “personal benefit of themselves, their family members, or their homestead.” 

SB 988 prohibits a “hiring entity” from discriminating or taking any adverse action against a “freelance worker” for opposing any practice prohibited by the statute, seeking enforcement of rights under the statute, or participating in related proceedings.   

An aggrieved “freelance worker” or a public prosecutor – Attorney General, district attorney, city attorney, county counsel, or any other city/county prosecutor – may bring a civil action for any violation of SB 988. In addition to attorney’s fees and costs, and any other remedies determined by the Court, a prevailing plaintiff may also be entitled to damages depending on the type of violation.

 

Senate Bill 1105: Paid Sick Leave for Agricultural Employees

Existing law lists qualifying purposes for using paid sick leave, including for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, an employee or an employee’s family member (Labor Code Section 246.5).

Senate Bill1105 expands the California paid sick leave law to allow agricultural employees as defined in Labor Code Section 9110 who work outside, to use paid sick leave to “avoid smoke, heat, or flooding conditions,” including when the worksite is closed due to “smoke, heat, or flooding conditions” as determined by the Governor or other local authority.

 

Assembly Bill 2299: Model Notice re Whistleblower Protections

Currently, California law protects employees who engage in protected activity, including disclosures pertaining to noncompliance with applicable rule or regulation (Labor Code Section 1102.5). Employers are also required to “prominently display” a list of “employees’ rights and responsibilities under the whistleblower laws” (Labor Code Section 1102.8)

The bill requires the Labor Commissioner to develop a model notice and make it accessible on the Labor Commissioner’s website. AB 2299 further clarifies that employers who use the model notice developed by the Labor Commissioner, are in compliance with the notice requirements.

Notably, there is already a model notice on the Labor Commissioner’s website, but it currently states that the Division of Labor Standards Enforcement “believes” the notice “meets the requirements of Labor Code Section 1102.8(a).” The author of AB 2299 argues this “theoretically puts employers, including small businesses, in the position of analyzing and constantly monitoring the state’s complex whistleblower laws to ensure that their posted notice is accurate and up to date.” Therefore, AB 2299’s purposes is to resolve that uncertainty for the benefit of “businesses and workers alike.”

 

Assembly Bill 1870: Workers’ Compensation Notice

Existing law requires employers to post in a conspicuous place, a notice that states the name of the employer’s current workers’ compensation insurance carrier, and additional information regarding workers’ compensation such as the injured employee’s right to receive medical care, employee’s rights to select and change the treating physician, employee’s rights to receive benefits, protections against discrimination, etc.

Assembly Bill 1870 requires employers to also include information concerning an employee’s right to consult a licensed attorney, and specify that in most instances, attorney’s fees will be paid from an injured employee’s recovery.

 

Assembly Bill 2011: Expanding Mediation Program for Smaller Employers

A few years ago, the California Civil Rights Department created a pilot mediation program for smaller employers of 5-19 employees to help resolve disputes concerning the California Family Rights Act. The pilot program was set to expire on January 1, 2025.

This new bill makes the program permanent and adds claims for alleged violations of reproductive loss leave eligible for the small employer mediation program.

 

Assembly Bill 2123: Paid Vacation is No Longer Required as a Condition of PFL 

Eligible employees in California can apply for Paid Family Leave benefits from the State whenever they need time off work to care for a family member. The benefits provide up to eight weeks of 60-70 percent wage replacement. Beginning January 1, 2025, benefits will increase to 70-90 percent wage replacement.

Under current law, an employer may require employees to use two weeks of accrued vacation time before they can access PFL benefits.

Senate Bill 2123 deletes this provision, thus leaving the decision of whether to use vacation benefits before accessing PFL benefits up to the employee.

 

Assembly Bill 2324: Social Compliance Audits

Under AB 2324, employers who voluntarily conduct a “social compliance audit” to determine, in whole or in part, if child labor is involved in their operations or practices, must post on their website a report detailing the employer’s findings with respect to “compliance with child labor laws.”

A “Social compliance audit” is defined as “a voluntary, nongovernmental inspection or assessment of an employer’s operations or practices to evaluate whether the operations or practices are in compliance with state and federal labor laws, including, but not limited to, wage and hour and health and safety regulations, including those regarding child labor.”

When applicable, the report must contain:

(1) The year, month, day, and time the audit was conducted, and whether the audit was conducted during a day shift or night shift.

(2) Whether the employer did or did not engage in, or support the use of, child labor.

(3) A copy of any written policies and procedures the employer has and had regarding child employees.

(4) Whether the employer exposed children to any workplace situations that were hazardous or unsafe to their physical and mental health and development.

(5) Whether children worked within or outside regular school hours, or during night hours, for the employer.

(6) A statement that the auditing company is not a government agency and is not authorized to verify compliance with state and federal labor laws or other health and safety regulations.

 

Assembly Bill 2754: Prohibited Contracts  

Existing law prohibits a person or entity from entering into contracts for labor or services with certain contractors, including garment, janitorial, and warehouse contractors, if the person/entity knows or should know that the contract does not include sufficient funds to allow the contractor to comply with applicable wage and hour laws (Labor Code Section 2810).

The new bill adds “port drayage motor carrier,” defined as an individual or entity that hires or engages commercial drivers in the port drayage industry, to Labor Code Section 2810, for the purpose of targeting misclassification issues in that industry.

Per the California Teamsters Public Affairs Council, a sponsor of AB 2754, the bill can combat misclassification by making “cargo owners … vicariously liable for any labor code violations arising out of misclassification committed by their trucking contractors, and … cargo owners will be on the hook if they knowingly enter into unsustainable contracts that would require the contractor to violate the law or to lose money on the contract. Making cargo owners responsible in this way will incentivize them to only contract with companies that follow the law and properly classify their employees…”

 

Assembly Bill 2975: Certain Hospitals to Implement Weapons Detection Screening Policy

Certain hospitals are required to adopt a workplace violence prevention plan to protect their workers from aggressive and violent behavior.

Assembly Bill 2975 requires the Occupational Safety and Health Standards Board to amend the standards that apply to covered hospitals, to implement a weapons detection screening process by March 1, 2027.

 

Assembly Bill 2364: Increased Rates for Harassment Training for Covered Janitorial Employees

Current law requires janitorial service employers to provide biennial sexual violence and harassment prevention training to employees and use a “qualified organization” from a list prepared by the state. Existing law also establishes the rate for the training.

AB 2364 increases the rate from $65 per participant to:

• $80 per participant for training sessions having 10 or more participants;
• $200 per participant for training sessions having fewer than 10 participants.

On and after January 1, 2026, the applicable rate will increase with inflation.

 

Assembly Bill 2288 and Senate Bill 92: Amendments to the Private Attorneys General Act

Last but not least are the PAGA amendments the Governor signed into law on July 1, 2024. These amendments, which went into immediate effect, now permit employers to cure violations, cap penalties under certain conditions, and stay proceedings to attend early settlement conferences.

 

You can read more about the PAGA changes here.

 

Tal Burnovski Yeyni

Tal Burnovski Yeyni is a California employment defense attorney.