Every year we are surprised to look back and discover how many (and how significant) the year’s legal changes have been. And 2023 is no exception.
Your response to big and little changes in employment law in 2024 can make the difference in whether your workplace is protected from litigation. First step? Learn your new obligations . . . No one wants litigation to be the time you discover you missed an important change!
In this Newsletter, we will outline the following legal changes, and what you need to know and do in response:
- Protecting Your Company in Response to Changes in Wage and Hour Laws>
- What You Need to Know About Expanded Employee Entitlements to Time Off
- New Discrimination and Harassment Protections, and New Restrictions on Employer Inquiries
- Significant Developments in Employer’s Health and Safety Obligations
- Latest Developments in the Enforceability of Arbitration Agreements
- New Employer Obligations in Protecting Employee (and Applicant) Privacy
- New Restrictions on Restraint of Trade
As always, let us know if you have any questions and how we can help!
Protecting Your Company in Response to Changes in Wage and Hour Law
(1) California Minimum Wage is Increased; What That Means for You. California’s minimum wage will increase to $16.00 per hour effective January 1, 2024. Many local cities and counties have their own higher minimum wage rates, some of which will increase as of the new year (while others increase in July 2024). More . . .
(2) Percentage Bonuses Now Can be Calculated Using the Federal (FLSA) Method Without Having to Factor Them Into the Regular Rate of Pay. Previously, there was a question as to whether a California employer could use the federal Fair Labor Standards Act’s (“FLSA’s”) percentage bonus calculation method (rather than factoring the bonus into the regular rate of pay). A California Court of Appeal held that an employer’s calculation of overtime on a nondiscretionary bonus using the FLSA percentage bonus calculation method was permissible, but be mindful of California law on this topic. More . . .
(3) Temporary Layoff or Furlough Triggers Final Pay/Vacation Payout. Employers who furlough or temporarily lay off employees without a specific return-to-work date should issue “final” paychecks, including each employee’s accrued vacation or paid time off. More . . .
(4) Rounding Policies Are Unacceptable in Companies That Can Capture Exact Time Worked. In 2022, the California Court of Appeal (Camp v. Home Depot) ruled that employers who “can capture and [have] captured the exact amount of time an employee has worked during a shift” must fully compensate employees for all the time worked, rather than rounded time, even if the rounding practice is neutral on its face and as applied. This year the California Court of Appeal (Woodworth v. Loma Linda Univ. Med. Center) dealt another blow to employers, inching toward eliminating the ability to round employee time punches. More . . .
(5) Some Not-Surprising and Important Decisions from the DOL on Telework. The U.S. Department of Labor (“DOL”) issued new guidance under the FLSA and Family and Medical Leave Act (“FMLA”). More . . .
(6) New Minimum Wage Hikes for Employees in the Healthcare Industry. California has enacted new minimum wage requirements for employees in the healthcare industry, which vary depending on the size and type of the health care operation or facility. More . .
(7) Minimum Wage Increase for Employees at National Fast Food Chains: Effective April 1, 2024, there is a new minimum wage rate of $20 per hour for employees at a “National Fast Food Chain.” More . . .
(8) Employers Must Pay for Food Handler Cards, and Addtional Related Obligations. California has long required food handlers in restaurants to obtain certification and, until now, training and testing has been the employee’s responsibility. More . . .
(9) Right of Retention and Recall for Hospitality Workers. Since 2021, employers have been required to recall employees in the hospitality industry laid off due to COVID-19, in order of seniority. The new law creates a rebuttable presumption that anyone separated by a covered employer for economic reason was separated due to the COVID-19 pandemic. More . . .
(10) Expanded Local Enforcement of the Labor Code. California law now authorizes local prosecutors to bring actions to enforce the Labor Code. More . . .
What You Need to Know About Expanded Employee Entitlements to Time Off
(1) California Employers Must Offer Increased Sick Leave Entitlements. Effective January 1, 2024, employers must provide eligible California employees with more paid sick leave: increased from three days/24 hours to up to five days/40 hours per year. More . . .
(2) New Leave for Reproductive Loss. Employers covered by the California Family Rights Act (“CFRA”) now are required to provide five (5) days of unpaid “Reproductive Loss Leave” in the event of a “reproductive loss event.” More . . .
(3) The DOL has Issued Guidance on FMLA on the Following Topics:
- FMLA Eligibility for Remote Workers
- Defining Remote Employee Worksites
- FMLA and Indefinite Reduced Work Schedules
- Calculating FMLA Used During Holidays
New Discrimination and Harassment Protections, and New Restrictions on Employer Inquiries
(1) FEHA Regulations Regarding Criminal History Background Checks Have Been Expanded. Effective October 1, 2023, the California Civil Rights Council issued revised regulations regarding criminal background checks in employment. Generally, the revised regulations require that employers begin using a new process, including a more in-depth analysis using new evaluation factors, before making adverse employment decisions based on criminal conviction history. More . . .
(2) A New Standard for Undue Hardship; Religious Accommodation. The U.S. Supreme Court in Groff v. DeJoy has “clarified” (and changed) the religious accommodation standard under Title VII of the Civil Rights Act that employers (and the Equal Employment Opportunity Commission (“EEOC”)) have relied upon for more than 46 years. More . . .
(3) The EEOC Published Updated (Proposed) Guidance on Harassment in the Workplace. On September 29, 2023, the EEOC issued proposed enforcement guidance on workplace harassment. The Proposed Enforcement Guidance on Harassment in the Workplace advises employers on responding to new workplace realties, including LGBTQ rights, online misconduct, abortion, and a number of different types of harassment. More . . .
(4) The EEOC Published Updated Guidance on Visual Disabilities. On July 26, 2023, the EEOC issued updated guidance, Visual Disabilities in the Workplace and the Americans with Disabilities Act, addressing how the Americans with Disabilities Act (“ADA”) applies to job applicants and employees with visual disabilities. More . . .
(5) Retaliation Claims Now Presumed Unless Rebutted. There is now a rebuttable presumption of retaliation if an adverse action is taken against an employee within 90 days of filing or participating in a Labor Commissioner claim, filing or participating in a Fair Pay Act claim, engaging in lawful, off duty conduct, or other actions protected by the Labor Code. More . . .
(6) Business Entity Agents Can Be Directly Liable For FEHA Violations. The California Supreme Court clarified the meaning of the term “employer” in FEHA as it relates to business-entity agents: business-entity agents with at least five employees who carry out FEHA-regulated activities on behalf of an employer fall within the definition of “employer” and can be held directly liable for employment discrimination claims in appropriate circumstances. More . . .
Significant Developments in Employers’ Health and Safety Obligations
(1) Employers Must Develop a Workplace Violence Prevention Program. Effective July 1, 2024, nearly all California employers must develop and implement a workplace violence prevention plan (as part of their Injury and Illness Prevention Plans (“IIPP”)). More . . .
(2) Employers are Constrained by New Marijuana Use Protections. Effective January 1, 2024, California employers may not discriminate in hiring, termination, or any term or condition of employment, or otherwise penalizing a person for their off duty use of marijuana. And there is more . . .
(3) OSHA has updated recordkeeping requirements. OSHA announced new rules expanding the types of OSHA forms employers must submit via the Injury Tracking Application (“ITA”) in 2024, for the 2023 calendar year. More . . .
Latest Developments in the Enforceability of Arbitration Agreements
(1) Mandatory arbitration agreements continue to be enforceable in California. Early this year, the federal Ninth Circuit Court of Appeals held California’s statutory ban on mandatory employment arbitration agreements is entirely preempted by the Federal Arbitration Act (“FAA”) for employers to whom the FAA applies. Since that time, the California Supreme Court has ruled: Arbitration agreements do not prevent employees from bringing PAGA claims in court. More . . .
(2) There were other meaningful court decisions on arbitration this year.
- Arbitration fees must be received by arbitrator within 30 days or plaintiff may pursue claims in court.
- Employers must take steps to ensure electronic signatures are enforceable. More . . .
(3) And there is More on the Horizon for 2024. More . . .
New Employer Obligations in Protecting Employee (and Applicant) Privacy
(1) Obligations under the CPRA will go into effect on March 29, 2024. Enforcement of the California Privacy Rights Act (“CPRA”) is now stayed until March 29, 2024 (extended from July 1, 2023). Upcoming expansions to the CPRA will provide consumers (including employees) with even greater rights. More . . .
(2) Separation Agreements, Confidentiality and Non-Disparagement Clauses Came under New Scrutiny. This year the National Labor Relations Board (“NLRB”) ruled that confidentiality and non-disparagement agreements commonly included in employment severance agreements may be deemed unlawful under the National Labor Relations Act (“NLRA”) and this is not limited to unionized workplaces. More . . .
New Restrictions in Restraint of Trade
California law already prohibits employers, with very limited exceptions, from entering into or attempting to enforce noncompete agreements with employees. The new law establishes that noncompete agreements are void in California regardless of whether the employee executed the agreement in another state or worked in another state when executing the agreement.
Additionally, employers are required to notify current employees and former employees (employed after January 1, 2022) in writing by February 14, 2024, that any noncompete agreements they may have signed are void.
Many Thanks to You for Being Part of a Wonderful Year
Please reach out with any questions! We are here for you.
