2023 Labor & Employment Law Update for California Employers

2022 was again a busy year for the California Legislature's enactment of new laws affecting California employers in 2023. Below you will find our annual Employment Law Update.

California Expands Employer Pay Scale Disclosure and Data Reporting Requirements

Starting on January 1, 2023, all California employers will be required, upon request, to provide employees and applicants for employment with the “pay scale” for the position in which the individual is either currently employed or to which they are applying. “Pay scale” is defined as the salary or hourly wage range that the employer reasonably expects to pay for the position.

Employers with 15 or more employees will be also required to include the pay scale for a position in any job posting. The law further requires employers to maintain records of a job title and wage rate history for each employee for the duration of the employment and for three years after the end of the employment relationship. Employers who do not comply with this law can be liable for civil penalties up to $10,000 per violation.

SB 1162 also requires all private employers with 100 or more employees (or 100 or more employees hired through labor contractors) to submit a pay data report to the California Civil Rights Department (formerly the Department of Fair Employment and Housing) by the second Wednesday of May each year. This report must include the median and mean hourly rate for each combination of race, ethnicity, and sex within specific job categories.

Employers who do not comply with the new pay data report obligations could face liability for civil penalties up to $100 per employee for an initial failure to file, and up to $200 per employee for any subsequent failure to file the required pay data report.

California Expands Leave Rights to “Designated Persons”

AB 1041 expands leave of absence rights to include care for “designated persons” under two new laws. As of January 1, 2023, eligible employees can take unpaid, job-protected leave to care for “designated persons” under the California Family Rights Act (“CFRA”) and can use paid sick leave (“PSL”) to care for “designated persons” under the California Healthy Workplace, Healthy Family Act of 2014.

Employers should be aware of differences in the statutory definition of “designated persons” under the two laws. For PSL purposes, AB 1041 expands the definition of the term “family member” to include designated person, which is defined as “a person identified by the employee at the time the employee requests paid sick days.” In contrast, under the CFRA, designated person means “any individual related by blood or whose association with the employee is the equivalent of a family relationship.”

Employers should review and amend their leave policies to comply with AB 1041. Employers should also consider whether to limit employees to one designated person per 12-month period as permitted under both amended laws. Finally, employers should be aware that AB 1041 further complicates leave administration by adding another difference between the persons for whom protected leave can be taken under the CFRA and its federal counterpart, the Family and Medical Leave Act (“FMLA”) as the FMLA does not provide leave for designated persons.

Notification for COViD-19 Exposure

Effective January 1, 2023, AB 2693 will modify Labor Code Sections 6325 and 6409.6 to ease employer notification requirements for workplace COVID-19 exposures.

AB 2693 alters employers’ existing internal notice obligations to its employees upon a potential COVID-19 exposure. Under existing law, if an employer learns that an employee has COVID-19, it must provide written notice of the potential exposure within one business day to all employees at the same worksite that may have been exposed to COVID-19. Employers may continue to provide written notice, in a manner the employer normally uses to communicate employment-related information, to all employees who were at the same worksite as the confirmed case of COVID-19. However, employers are no longer required to provide this manner of written notice.

In lieu of requiring individual written notices to employees, AB 2693 expands the scope of notice by providing a number of alternatives to giving written notice. For instance, an employer may now opt to prominently display a notice to alert employees to a potential COVID-19 exposure. The employer must post the notice within one business day from when it is notified of a potential COVID-19 exposure, keep the notice posted for at least fifteen calendar days, draft the notice in English and the language understood by the majority of the employees, and display the notice in the location(s) where it posts other workplace rules and regulations. Additionally, if the employer customarily posts workplace notices on an online employee portal, it must also post this notice on the employee portal. AB 2693 requires employers to maintain a record of each date the notice was posted at each worksite and allows the Labor Commissioner to access and inspect those records. The notice must include the following information:

• • • The dates on which an employee, or employee of a subcontracted employer, with a confirmed case of COVID-19 was on the worksite premises within the infectious period;
    • The location of the exposures, including the department, floor, building, or other area, but the location need not be so specific as to allow individual workers to be identified;
    • Contact information for employees to receive information regarding COVID-19-related benefits to which the employee may be entitled under applicable federal, state, or local laws, as well as an employee’s anti-retaliation and anti-discrimination protections; and
    • Contact information for employees to receive the cleaning and disinfection plan the employer is implementing.

AB 2693 also eliminates notice requirements outside the organization. Relatedly, the California Department of Public Health is no longer required to include information on its website such as workplace industry information regarding COVID-19 outbreaks and cases received from local public health departments.

New Bereavement Leave Requirements

Existing law makes it unlawful for an employer to refuse to grant a request by an eligible employee to take up to 12 workweeks of unpaid protected leave during any 12-month period for family care and medical leave. AB 1949 expands Government Code Section 12945.7, which creates an additional form of protected leave for employees who have worked for a least 30 days prior to commencement of the leave. The amendment makes it unlawful for an employer with five or more employees to refuse to grant a request by an eligible employee for bereavement leave upon the death of a family member. A “family member” is defined as a spouse, child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law. The requested leave can be unpaid, where there is no existing paid bereavement leave policy, except that an employee may use vacation, personal leave, accrued and available sick leave, or compensatory time off that is otherwise available to the employee. The eligible employee shall be entitled to no less than five days of bereavement leave, which must be completed within three months of the date of death, and those days are not required to be consecutive.

Additionally, Government Code Section 12945.21 has been amended to create a small employer family leave mediation pilot program for employers with 5 to 19 employees. An employee making claims under Section 12945.7, must request a right to sue letter from the department. The department’s dispute resolution division will notify the employee of the requirement to pursue mediation before filing a civil action.

Expansion of Reproductive Healthcare Decisions

California has added protection for employees’ reproductive health decisions by amending the Fair Employment and Housing Act (FEHA) effective January 1, 2023. The Contraceptive Equity Act of 2022 (Senate Bill 523) prohibits discrimination against an applicant or an employee based on reproductive health decisions. It also prohibits employers from requiring applicants or employees to disclose information relating to reproductive health decisions as a condition of employment or employment benefits. Reproductive health decisions protected by this new legislation include “a decision to use or access a particular drug, device, product, or medical service for reproductive health.”

This new legislation also expands required health plan coverage for contraceptives. It amends the California Government Code to require that most health benefit plans or contracts provide coverage for contraceptives, vasectomies, and related services, consistent with the requirements of certain provisions of the California Health and Safety Code and California Insurance Code.

Off-the-Job Protections for Cannabis Use

Beginning in 2024, California employers will be prohibited from discriminating against a person in hiring, termination, or any term or condition of employment, or otherwise penalize a person for the use of cannabis off the job and away from the workplace except in limited circumstances. It will also become unlawful for employers to make hiring or disciplinary decisions based upon an employer-required drug screening test that has found the person to have nonpsychoactive cannabis metabolites in their hair, blood, urine or other bodily fluids.

This new legislation, which will become part of the California Fair Employment and Housing Act, is predicated upon a finding that after tetrahydrocannabinol (THC), the chemical compound in cannabis that can indicate impairment, is metabolized, it is stored as a nonpsychoactive cannabis metabolite. These nonpsyohoactive metabolites, the Legislature found, do not indicate impairment, only that an individual has consumed cannabis in the recent past. Since employers now have access to drug tests that do not rely upon the presence of nonpsychoactive cannabis metabolites (i.e., those which have no correlation to impairment on the job), those alternative tests will become the only valid drug tests that may be used in the employment context.

The authors of the legislation (Assembly Bill No. 2188) note that although California has legalized the recreational use of cannabis since 2016, workers can still be disciplined or fired for off-the-job cannabis use even though they were not impaired at work. As explained by the Senate Committee Report, “[w]hile such a test [detecting only nonpsychoactive cannabis] does suggest whether or not the worker has used cannabis at some point in the recent past, it does not tell the employer anything at all about whether the worker is presently impaired from cannabis.”

Importantly, nothing in the new law permits an employee to be impaired by, or to use or possess cannabis on the job. Nor does it apply to employees in the building and construction trades or to positions that require a federal government background investigation or security clearance. In addition, the statute does not preempt federal or state laws that require applicants or employees to be tested for controlled substances as a condition of employment.

Employers have 12 months to prepare for this new law. Part of that preparation will be to review and update pre-employment testing guidelines, employee handbooks and personnel policies, as well as to assess their options to maintain a drug- and alcohol-free workplace. Employers will also want to consult with their existing medical clinics to ensure compliance with permissible drug testing modalities. Administrative guidance and regulations from the California Civil Rights Department is also expected to clear up a number of ambiguities in the new legislation before its effective date of January 1, 2024.

Prohibition on Adverse Employment Action for Fears of Workplace Safety

On January 1, 2023, SB 1044 will become law, prohibiting employers, in the event of an “emergency condition,” from taking any adverse employment action against an employee who refuses to report to, or leaves, a workplace or worksite within the affected areas because the employee had a reasonable belief that the workplace or worksite is unsafe.

The law goes further, prohibiting the employer from preventing any employee from accessing a phone or other mobile device to seek emergency assistance, assessing the safety of the emergency condition or communicating with others to confirm that the employee is safe. The new law does require employees to notify employers of the emergency condition.

The new law defines “emergency condition” as either “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 new law also states that a health pandemic does not constitute an “emergency condition.”