2023 Top Ten Changes in Employment Law

Tue, 01/17/23

Happy New Year!

With the start of the new year, it is time to dust off the employee handbook, review your policies and procedures, and make sure they comply with all the new laws, regulations, and interpretations that have either already gone into effect or will in early 2023.

Below, we have identified our “top 10” changes. Please keep in mind there were hundreds of laws, regulations, and changes implemented at the local, state, and federal levels throughout 2022.  So, if you need a handbook/COVID-19 policy review or have any questions, please call.

1. California and Local Minimum Wage Raised – In addition to the gradual increase to minimum wage that has been in effect under California law, several Sonoma County cities have increased minimum wage beyond that required by the state. Below is a table that describes the state and local city requirements:

LocalityEffective DateEmployers With 26 Or More EmployeesEmployers With Less Than 26 Employees
Santa Rosa1/1/2023$17.06Same

Action: Review your payroll to ensure all employees are being paid the new minimum wage, send written notice of the wage change to affected hourly employees, and be sure your salaried exempt employees are earning at least two times (2x) California minimum wage ($64,480 for employers of all sizes).  Please note that many other cities and counties in California have passed higher minimum wage requirements, including Belmont, Berkeley, Cupertino, El Cerrito, Emeryville, Los Altos, Los Angeles City and County, Malibu, Mountain View, Novato, Oakland, Palo Alto, Pasadena, Redwood City, Richmond, San Diego, San Francisco, San Jose, San Leandro, San Mateo, Santa Clara, Santa Monica, South San Francisco, and Sunnyvale.

2. COVID-19 Regulations – The Cal/OSHA Emergency Temporary Standards (ETS) adopted in 2020, and revised multiple times, have now become permanent (meaning they will not change for at least two (2) years), after Cal/OSHA voted to approve them on December 15, 2022. The ‘permanent’ guidelines will (1) end exclusion pay for employees who contract COVID while at work; (2) mandate notice to all potentially exposed employees but relaxes the specifics of what it says and how it is communicated, (3) refer exclusion and return to work guidelines to the California Department of Public Health (CDPH), and (4) refer the definition of “exposure” to the CDPH, among other things.  Some highlighted changes are as follows:

  • Definition of “Exposure” – the CDPH now defines an exposure to be a cumulative of 15 minutes in a 24-hour period in the same “airspace” as the person with COVID, if the airspace is 400,000 cubic feet or smaller.  This translates to most homes, waiting rooms, and airplanes.  If the person was in a space larger than this (or outside), then the person will be considered “exposed” if they were within six feet of the person for the requisite amount of time. This could be open floor plan offices, large retail stores, manufacturing plants, etc.  The regulations will make an exception for persons who were “passing through” near an infected person.
  • Exclusion and Return to Work – Again, the CDPH has taken on the challenge of keeping this guideline updated.  Currently, anyone who was exposed to COVID need NOT be excluded from work unless they have COVID-like symptoms.  Otherwise, exposed employees should wear a well-fitting face mask for ten days while inside.  They should also test 3 - 5 days after the exposure.  For anyone who tests positive, the employee must stay out of work for at least five (5) days and can return once they test negative, do not have a fever and other symptoms are improving, or it has been ten days, they do not have a fever and their other symptoms are improving.
  • Some Relaxations – Cal/OSHA has relaxed many of the original regulations which have continued on in the permanent rules.  For example, notice to employees of an exposure to COVID need be done “as soon as possible” rather than within one day.  However, the notice requirement is currently overridden by Labor Code section 6409.6 which is in effect through 2023.  Section 6409.6 requires notice within one business day, but allows the employer to opt to post notice in the workplace and on employee online portals rather than sending direct notice to all exposed employees.  The regulations no longer mandate a professional-level hazardous material cleaning each time an employee was in the workplace with COVID and also do not require employers to report outbreaks to the local health department.  Finally, the permanent regulations do not require employers to pay employees who are unable to work due to a workplace exposure.

Action:  Ensure you are familiar with the Cal/OSHA requirements for excluding employees from the workplace, notice to employees regarding exposure and meeting your obligations to mitigate COVID exposure in the workplace.  Ensure all current policies are in writing and communicated to your employees.

3. Pay Transparency and EEO Data – Several new laws were passed to further the effort toward pay transparency and Equal Pay Act goals. Note that the definition of “ pay scale” is the range the employer would reasonably expect to pay for the position.  You may provide the range of pay that you actually pay for the position if you choose.

  • Releasing Pay Scales – All employers must now provide pay scale information to an applicant or employee who requests it.  The pay scale must show the job title and the minimum and maximum salary/hourly pay scale.  Applicants and employees may request this information for their own job title, or the job title for which they are applying.
  • Job Advertisements – For employers with 15+ employees, the relevant pay scale must be included in all new job advertisement.  If the position will be paid on commission or at a piece rate, the specifics of this must also be included in the posting.  The state has issued an FAQ page for more information here https://www.dir.ca.gov/dlse/california_equal_pay_act.htm
  • EEOC/CRD Reporting – Employers with 100+ employees have been required to report employee pay data based on sex, race, and ethnicity to the U.S. Equal Employment Opportunity Commission (EEOC) by way of the EEO-1 form and copy that form to the State of California. Now, the Civil Rights Department (CRD; formerly known as the Department of Fair Employment and Housing [DFEH]) requires a separate form to be filed with California, rather than just submitting a copy of the EEO-1 form.  Employers must (1) list each job category and provide both the median and mean hourly rate by each combination of race, ethnicity, and sex; (2) if you have multiple establishments, you may submit reports per establishment rather than consolidating the information; (3) for employers with 100+ employees hired through labor contractors (including farm labor contractors), you must produce data on pay, hours worked, race/ethnicity, and gender information in a separate report.  The contractor must assist you in providing this information.  The CRD website has sample forms for use and the forms will be submitted through an online portal, due May 10, 2023, and May of each year thereafter.

Action: Ensure you have prepared pay scale information for all positions and update all third parties who post open positions for you.  If you have 100+ employees, please refer to the CRD’s website for more information on the new forms.  The website will be updated in the coming months.

4. Unpaid Bereavement Leave – All employers with five (5) or more employees must offer up to five (5) days off to an employee whose close family member has died. The time need not be taken all at once, but must be taken within three (3) months of the death.  Employers may ask for documentation to confirm the need for the time off.  The time off need not be paid.

Action: Review and update your handbook to ensure you offer at least five (5) days off, and the policy complies with the other terms of the new law.  For example, if you already offer three (3) paid days off, you must just update your policy to state that employees may take up to five (5) days off, and three (3) of those days will be paid.

5. Time Off for Caring for ‘Designated Persons’ – Employees now may take their sick leave or leave under the California Family Rights Act (CFRA) to care for a designated person who may not be related to them. Confusingly, the definition of “designated person” is different between the two types of leaves.  For sick leave, employees may designate anyone to be considered a close family member.  For CFRA leave, the designated person needs to be related by blood or whose association with the employee is the equivalent of a family relationship at the time of the requested leave.  Under both leaves, the employee may designate the person at the time they need the leave, but once designated, they cannot change the designation for at least twelve (12) months.  The designated person does not need to be the same person for purposes of the two separate leave rights.

Action: Update your handbook to include ‘designated person’ to the definition of close family member under both the sick leave section and CFRA leave section.  Also update your hiring procedures if you will ask new hires to make their designations at the time of hire.

6. Protection for ‘Reproductive Health Decision-making’ – The Fair Employment and Housing Act was amended to add “reproductive health decision-making” to the list of protected characteristics, in addition to things like age and race.  This means applicants, employees, contractors, and interns are protected from harassment, discrimination, and retaliation due to a decision to use or access a particular drug, device, product, or medical service for reproductive health.  For example, applicants cannot be asked if they use birth control or have had a vasectomy as part of the hiring process.  Similarly, a manager may not harass an employee based on their reproductive health decision-making if that information is made known to them.

Action: Each protected characteristic must be specified in your employee handbook.  Update your handbook to ensure this is added to the list.  Ensure all employees are trained regarding this protection, so as to avoid claims for harassment, discrimination or retaliation that may be raised down the road.

7. Certain Rights During Emergency Conditions – Extreme weather and other natural disasters are nothing new to California residents.  This law requires employees to be given unpaid time off (an unspecified amount) in the event of an emergency condition.  Emergency Conditions are those in which an employee has a reasonable belief that the workplace or site is unsafe due to conditions of disaster or extreme peril or during an order to evacuate a workplace, worksite, an employee’s home, or the school of an employee’s child due to a natural disaster or criminal act. Employees must also be permitted to use their personal phone for purposes of communicating about seeking assistance or safety or communicating their safety to others.  There are exceptions for employees who regularly work in emergency conditions such as firefighters or paramedics.  It is implied that the amount of time off will last only as long as the reasonable belief of the existence of an Emergency Condition continues.

Action: Update your handbook to add this new right to unpaid leave.

8. California Consumer Privacy Act (CCPA) – The CCPA and the companion California Privacy Rights Act (CPRA) apply to the following companies: (1) gross annual revenue of $25 million or more, or (2) buy, sell, or share the personal information of 50,000 or more Californians, or (3) derive 50% or more of their annual revenue from selling Californian’s personal information. Relevant companies must act regarding the collection of “consumer information.”  The term “consumer” includes employees, vendors, other companies, website visitors, as well as customers.  The CCPA/CPRA require notice to consumers, explaining what is done with the personal information you collect, and giving them the opportunity to opt out of collection, and/or cease you from sharing that information with others.  Personal information is defined extremely broadly to include items like name, address, credit card information, email address, biometric information, video surveillance, GPS surveillance, etc.

For employers, the CCPA has been in place since 2018, but exempted the notice and opt out obligations for employees.  Beginning January 1, 2023, the exemption no longer applies.  All applicable employers must create notices to their employees to explain what information is collected and give the employees the option to opt out.  As of 2023, the CPRA also requires employers to give employees notice of their right to know what information is being collected, the right to delete information collected, right to opt out of the sale or sharing of information, right to correct information, and right to opt out of ‘automated decision-making technology’ which includes profiling employees based on their performance, health, personal preferences, interests, reliability, behavior, location or movements.

Employees may not require an employer to cease the collection and use of their personal information if it is for purposes of the employment relationship and providing benefits to the employee and their dependents.  However, the notice provisions must still be met.

Action: Identify if your company is covered by the CCPA/CPRA.  If so, adopt the necessary notices for your employees, and consult with your attorney to ensure the notice is also included in your contracts and website.

9. Cal-Savers – If your business has 5+ employees and does not have its own workplace retirement plan, it was required to opt in to the CalSavers program as of June 30, 2022. For any employers who did not know about this new requirement, it requires all applicable employers to begin deducting money from its employees to put into a state-run retirement plan.  Your employees must be given notice of the plan, and the opportunity to opt out.  If an employee does not opt out, you must move forward with the deductions.  See the State’s website for more information https://www.calsavers.com/.

Action: If you do not have a company retirement plan for your employees, you must comply with the CalSavers program.

10. Off-Duty Use of Marijuana – Although not in effect until January of 2024, this new law has been heavily covered in the news. Beginning one year from now, employers will not be permitted to discriminate against an employee for off-duty marijuana use.  This means that if you have a drug testing policy, the test must be able to determine whether the employee has used marijuana during work hours before you can hold the employee accountable for drug use.  The new law will not apply to the building and construction trade and other positions that require a federal pre-employment screening.

Action: Consider updating your handbook now to clarify prohibited conduct to be on-duty marijuana use, and confirm with your drug testing facility whether they have the appropriate testing available.

Key Cases From 2022 – As usual, there were dozens of employment law cases decided this year that impacted employers.  We would like to call your attention to three of these cases below.

Viking River Cruises v. Moriana (2022) – The U.S. Supreme Court held that an employee arbitration agreement, agreeing to send all individual disputes to arbitration, can be used to send the individual portion of a PAGA claim to arbitration as well.  The Court also held that the non-individual portion of the same PAGA claim must be dismissed in such a case.  Additional cases are in the pipeline with the California Supreme Court which may create carveouts and further interpretations of this decision.

Action: Please see our email blast about this case decision here. Consider whether adopting an arbitration agreement is right for your company.

Naranjo v. Spectrum Security Services (2022) 13 Cal.5th 93 – The California Supreme Court confirmed that an employee who prevails on a claim for unpaid wages (which includes non-payment, underpayment, failure to pay overtime, or failure to pay meal or rest period premiums) is also entitled to wage statement penalties and waiting time penalties.  These penalties have historically been included with wage claims, but their applicability was called into question by the lower courts in Naranjo.

  • If an employee is not paid all wages owed, then the applicable wage statement(s) during the period of underpayment or non-payment will be found to be defective.  Labor Code section 226(e) permits an employee to recover a penalty of $50 for the first defective wage statement and $100 for every further violation, up to a maximum of $4,000.
  • Furthermore, the employee who is owed wages as described above and either quits or is terminated, can claim the waiting time penalty under Labor Code section 203 because all wages (not just the final paycheck) were not paid at the time of termination.  The penalty is calculated at the employee’s daily wage multiplied by the number of days before the employer pays all outstanding wages owed, up to a maximum of thirty (30) days. Often, waiting time penalties can dwarf actual unpaid wages owed.

Action: Ensure you are properly (1) capturing all time worked by hourly employees, (2) providing all employees with meal and rest periods, and paying them the penalty for a missed non-compliant meal or rest period, and (3) properly classifying employees as exempt or non-exempt from overtime. We strongly recommend auditing your pay policies to ensure you comply.

Camp v. Home Depot U.S.A. Inc. 84 Cal.App.5th 638 & Cadena v. Customer Connexx LLC 51 F.4th 831 (9th Cir.) – Both of these cases dealt with the question of what time is compensable work time. The trend in California is to identify more and more time as compensable, including pre-work tasks like clocking in and post-work tasks like setting an alarm on your way out of the building.

               In Camp v. Home Depot, the Court of Appeals ruled that because Home Depot can and does track each minute its employees work (through timekeeping software), it is not permitted to round its employee’s time for purposes of calculating hours worked. This is true even if the rounding policy is fair and neutrally applied.

               In Cadena v. Customer Connexx LLC, the 9th Circuit held that call center employees who spend time booting up their computer at the beginning of the day before they are able to clock into the timekeeping software on their computer, are owed wages for that time, despite it being only a few minutes per day.

Action: We strongly recommend against rounding time entries, even if the rounding is neutral and does not prejudice the employee.  We also strongly encourage you do a time audit to consider pre and post work tasks that may be compensable and adopting a policy to compensate that time.

We hope you had a great 2022 and will have an even better 2023. 

Please contact Arif Virji, Samantha Pungprakearti, Justin Hein, or Kristin Mattiske-Nicholls for help with your labor and employment law needs at Carle, Mackie, Power & Ross LLP, 707-526-4200.

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