As 2023 begins, so does a slew of new laws and regulations that will affect California businesses.
Every year, a raft of bills are passed by the state Legislature and signed into law by the governor. The end result is another round of new laws that employers need to stay on top of.
1) Pay disclosure
This sweeping law in part requires more disclosure of pay information by employers. Under current law, employers are required to provide the pay scale for a position upon reasonable request by a job applicant. SB 1162 goes a step further by:
- Requiring employers, upon request by a current employee, to provide the pay scale of the position they are employed in.
- Requiring employers with 15 or more workers to include pay scale in any job postings for open positions.
- Requiring employers to maintain records of job titles and wage rate history for each employee while employed for the company, as well as three years after their employment ceases.
Note: The law defines “pay scale” as the salary or hourly wage range that the employer “reasonably expects” to pay for the position.
Penalties range from $100 to $10,000 per violation. The Department of Labor Standards Enforcement will repeal the fine for first violations if the employer can show that all of its job postings have been updated to include pay scale information. This law takes effect Jan. 1, 2023.
2) Employee treatment during state of emergency
This new law, SB 1044, bars an employer, in the event of a state of emergency or an emergency condition, from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace within the affected area because they feel unsafe.
Also, employees would be allowed to leave work regardless of existing health and safety standards and regardless of whether or not the employer has provided health and safety protections.
Under the measure, workers could also walk off the job during an “emergency condition,” which is defined as:
- Conditions of disaster or extreme peril to the safety of persons or property caused by natural forces or a criminal act.
- 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.
SB 1044 also bars employers from preventing employees from using their mobile phones to seek emergency assistance, assess the safety of the situation or communicate with another person to confirm their safety.
The law, which takes effect Jan. 1, 2023, does not cover first responders and health care workers.
3) Cannabis use and discrimination
This law bars employers from discriminating in hiring, termination or other conditions of employment based on employees using cannabis while off duty.
The bill’s author says the legislation is necessary because THC (tetrahydrocannabinol), the active ingredient in marijuana, can stay in a person’s system after they are no longer impaired. As a result, drug testing may detect THC in an employee’s system even if they used it weeks earlier and it is having no effect on their job performance.
AB 2188 does not require employers to permit employees to be high while working.
The bill would exempt construction trade employees and would not preempt state or federal laws that require employees to submit to drug testing. This law takes effect Jan. 1, 2024.
4) Leaves of absence
Starting Jan. 1, AB 1041 expands who an employee can care for under the California Family rights Act and under the state’s paid sick leave law.
Both of these statutes allow employees to take leave to care for a family member, defined as a:
- Spouse,
- Registered domestic partner,
- Child,
- Parent,
- Parent-in-law,
- Grandparent,
- Grandchild, or
- Sibling.
The new law expands that to include “any individual related by blood or whose association with the employee is equivalent of a family relationship.” The employee can identify this designated person at the time they request family leave or when they request paid sick days.
5) OSHA citation postings
AB 2068 expands posting requirements for employers that receive workplace safety citations from Cal/OSHA. Under current law, employers that receive citations and orders from the agency are required to post them in or near the place the violation occurred, in order to warn employees about a potential hazard.
Starting Jan. 1, 2023, employers who receive citations and orders must post a new employee notification document that has been prepared by Cal/OSHA in English, as well as the top seven non-English languages in California:
- Spanish,
- Chinese (Cantonese, Mandarin)
- Vietnamese,
- Tagalog,
- Korean,
- Armenian, and
- Punjabi.
6) Contractor workers’ comp
A new law will require almost all contractors in California to carry workers’ compensation coverage, regardless of if they have employees or not.
Currently, only roofers are required to carry workers’ comp insurance even if they claim to have no employees.
SB 216 will take effect in two phases:
- Starting July 1, 2023, the following contractors will be required to carry workers’ compensation coverage regardless of whether they have staff or not:
- Concrete (C-8 license),
- Heating and air conditioning (C-20),
- Asbestos abatement contractors (C-22), and
- Tree service contractors (D-49).
- Starting Jan. 1, 2026, it applies to all licensed contractors or applicants for licensure, regardless of classification, unless they are organized as a joint venture and file a certificate of exemption from workers’ compensation.
7) Permanent COVID standard
As the year was drawing to a close, Cal/OSHA was working on a COVID-19 standard to replace the emergency standard that has been in place since 2020.
One of the biggest changes is that it will remove the requirement that employers pay workers who have been excluded from working due to them either catching COVID-19 or coming into contact with others in the workplace who have it.
This blanket requirement has essentially resulted in employers being on the hook for unlimited paid sick leave related to the coronavirus throughout the pandemic for both positive cases and those excluded due to an exposure.
Other changes in the proposed standard include:
- The definition of “close contact” would be the same as that of the California Department of Public Health, but would add that such close contact applies whether or not face coverings are used.
- Employers would no longer be required to evaluate whether their method of ventilation is adequate to reduce risk. The proposed language would require the methods of ventilation to be “effective.”
- Employers would no longer be required to report to the local health department, but would still be required to track all COVID-19 cases with name, contact information, occupation, location of work and last day at the workplace, as well as the date of the positive test or diagnosis.
8) CalSavers expanded
SB 1126 will require any person or entity with at least one employee to either provide them with access to a retirement program like a 401(k) plan or enroll them in the state-run CalSavers program.
Currently only companies with five or more employees who do not offer a retirement plan are required to enroll their workers in CalSavers. Also, since July 2022, the CalSaver’s law has applied to employers with five or more workers.
Employers that don’t provide a retirement plan for their workers, and who fail to register, can face a penalty of $250 per employee, as well as additional penalties for sustained noncompliance.
If you already have a qualified retirement plan (such as a 401(k) or a payroll-deduction IRA) for your employees, you do not have to participate.
Participating employers will deduct a default rate of 5% of pay from the paycheck of each employee at least 18 years old and deposit it into the individual’s CalSavers account. Employees can choose other deduction rates as well.
Employee participation is voluntary, and they can opt out at any time.
9) Bereavement leave
Employers with five or more workers will be required to provide up to five days of bereavement leave upon the death of a family member, under a new law starting in 2023.
This leave may be unpaid, but the law allows workers to use existing paid leave available to them, such as accrued vacation days, paid time off or sick leave. Employers are authorized to require documentation to support the request for leave, with any of the following being acceptable:
- Death certificate,
- Published obituary, or
- Verification of death, burial or memorial services.
10) PFL wage replacement
Existing California law allows employees to apply for Paid Family Leave and State Disability Insurance, both of which provide partial wage replacement benefits when employees take time off work for various reasons under the California Family Rights Act.
Starting in 2025, low-wage earners (those who earn up to 70% of the state average quarterly wage) will be eligible for a higher percentage of their regular wages under the state’s PFL and SDI benefit programs.
Jay is a graduate of the University of Pennsylvania School of Dental Medicine and also has an MBA from San Francisco State University. He has worked for a number of insurance carriers and brokers over the past 25 years. At UBF, Jay specializes in advocating for our clients in various issues, including grievances, benefit inquiries and eligibility issues.