2022 Changes in the Law:
What California Employers Need to Know for 2023
2022 has been another doozy year for employment law developments! No doubt you have a sense by now, there are some significant legislative changes and impactful court decisions. Schor Vogelzang + Chung wants you to be educated, protected, and ready for the New Year!
Here are what we think are the most significant changes from 2022, and what you need to know to be protected and successful in 2023. Let us know if you have any questions!
And remember to join us at 9:00 a.m. for our Breakfast Briefing on December 7, 2022. More details are below.
(1) Greater Pay Transparency Now Required With Applicants and Employees.
Under current California law:
- Employers cannot ask applicants about their salary history;
- Employers must provide applicants with pay scale information if they request it; and
- If employers have 100 or more employees, they must file annual pay data report with California Civil Rights Department (CRD) (which overlaps with EEO-1 reporting).
Effective January 1, 2023:
- All employers, regardless of size: Must provide a pay scale for a current employee’s position at the employee’s request. Also: there are new record retention requirements, including that employers must maintain records of job titles and wage rate histories for the duration of an employee’s employment and three years after termination of employment. The California Labor Commissioner will have authority to inspect these records. Failure to comply with the pay scale disclosure or record retention requirements can result in penalties ranging from $100 to $10,000 per violation.
- Employers with more than 15 employees: Must include a pay scale in all job postings (and provide that information to third parties who post those jobs). “Pay Scale” is defined as the salary or hourly wage range that the employer reasonably expects to pay for the position.
- Employers with 100 or more employees: Have significant additional pay data reporting requirements to submit to the CRD, regardless of whether they need to submit EEO-1 reports.
- To learn more about the new requirements, including the specific requirements for employers with 100 or more employees, click here.
(2) There Are Significant Expansions to Eligibility for Family, Sick and Bereavement Leave, and Changes to Military Leave.
- CFRA entitlement for caring for a family member is expanded to include “Designated Persons.” To learn more, click here.
- California Paid Sick Leave (under The Healthy Workplaces, Healthy Families Act of 2014) similarly must be available to care for a "Designated Person.” To learn more, click here.
- Employers with five (5) or more employees now are required to provide 5 days of unpaid bereavement leave in the event of the death of family member. To learn more, click here.
- There are expanded Military Leave entitlements. To learn more, click here.
(3) Some Good News for Enforcing Arbitration Agreements, But ... Wait For It . . .
On June 15, 2022, the U.S. Supreme Court in Viking River Cruises, Inc. v. Moriana ruled that employees can, in certain circumstances, be required to arbitrate their own ("individual") claims brought under California's Private Attorneys General Act ("PAGA"). The Court held that, as a result, a related "group" PAGA claim would in that case need to be dismissed in the face of a valid arbitration agreement. Stated differently, once an employee's individual PAGA claims are sent to arbitration, the employee lacks standing to pursue the PAGA lawsuit on behalf of other employees, and the group PAGA claim would need to be dismissed. For some background on PAGA, click here.
Following the ruling in Viking Rivers Cruises, the California Supreme Court granted review of a case called Adolph v. Uber Technologies, Inc. In the Adolph case, the Plaintiff was hired as an UberEATS driver and was classified as an independent contractor. Upon hire he executed an arbitration agreement that contained a waiver of the right to bring claims on a class or representative basis. In response to the plaintiff’s claim for misclassification of his status as an independent contractor (and all the unpaid wage and penalties claims that go with it), Uber argued that the threshold question regarding of whether the plaintiff was misclassified should go to arbitration, and the PAGA action should be stayed. The lower court ruled for the plaintiff and Uber petitioned for review. While the petition was pending, Viking River Cruises was decided. The pending issue before the California Supreme Court is whether a Plaintiff continues to have standing to represent other aggrieved employees in the non-individual PAGA actions.
Separately, there is a trend in lower California courts following the Adolph decision, which you can learn here.
Having Said All This: This remains an excellent time to consider implementing an arbitration agreement in your workplace. You will want to make an informed decision for your unique workplace, and we are happy to help.
(4) Significant Wage and Hour Developments
Here are the changes we found most impactful for California employers:
- Rounding policies are unacceptable in companies that can capture exact time worked.
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 their rounding practice is neutral on its face and as applied. The opinion does not define the circumstances in which an employer might argue that it is unable to capture time to the minute. For more information on what this means to California employers, click here.
Employees are entitled to waiting time penalties for unpaid meal and rest period premiums.
The failure to provide timely, uninterrupted meal and rest periods in California just became even more expensive. Here is a bit of the backdrop for how waiting time penalties accrue. In a recent case (Naranjo v. Spectrum Security Services, Inc.), the California Supreme Court ruled that the meal and rest period premiums must be reported on employee’s wage statements, and that they must be paid as of the date the employer pays final wages. In the event these premiums are not paid as final wages, the employee is entitled to seek waiting time penalties. Here is a skosh more information.
What all this means for your workplace? What are the best next steps to protect yourself from the increased risk of liability from these decisions? Click here to learn.
We love to protect our clients from expensive and unnecessary wage + hour litigation! Let us know if we can help!
(5) Employers may not discriminate against applicants or employees based on “Reproductive Health Decision-Making.”
The Fair Employment and Housing Act’s (“FEHA’s”) list of protected categories has been expanded: Employers are prohibited from requiring, as a condition of employment, continued employment, or a benefit of employment, that applicants or employees disclose information relating to their reproductive health decision-making. What does this protect, and what does it mean to you? Click here to learn.
(6) Covered Employers Have Significant New Disclosure Obligations under the CPRA.
The California Privacy Rights Act (CPRA) provides California consumers with rights and control over their personal information. Upcoming expansions to the CPRA will provide consumers (including employees) with even greater rights. Covered employers include those who:
- Have gross annual revenue of over $25 million;
- Buy, receive or sell the personal data of 100,000 or more CA residents or households; or
- Derive 50% or more of their annual revenue from selling or sharing California residents’ personal data.
Read more detail on the new privacy entitlements for California employees of covered employers here.
(7) Notice of a COVID-19 worksite outbreak to local government no longer is required.
Prior law required that an employer who received a notice of potential exposure to COVID-19 take specified actions within one business day of the notice of potential exposure, including providing written notice to all employees on the premises at the same worksite that they may have been exposed to COVID-19.
Under the new law, employers either may (1) provide written notification or (2) prominently display a notice of potential exposure to COVID-19 in the workplace in all places where similar notices to employees customarily are posted. This notice must remain posted for 15 days. Employers must keep a log of all the dates the notice was posted, and allow the Labor Commissioner access those records, through January 1, 2024.
(8) Let Your Employees Know They May Have a Seat.
Most of California’s Industrial Welfare Commission wage orders require that employees be provided with suitable seats when the nature of their work reasonably permits sitting. In a 2022 California Court of Appeal’s decision (Meda v. Autozone, Inc.), the question arose: what does it mean for an employer to have “provided” the required seating? The Meda court concluded that where an employer does not place a seat at a workstation, “the inquiry as to whether a seat has been ‘provided’ to the employee may become fact intensive.” Having said this, the court did reach some important conclusions, and some tips on minimum employer expectations. To read more and understand what your workplace should do in response, click here.
(9) Employees reasonably concerned that a workplace is unsafe based on an emergency condition (not including a pandemic) have increased rights.
Employers are prohibited from taking or threatening adverse action against an employee who refuses to report to work based on a reasonable belief that the workplace or worksite is unsafe due to an emergency condition. A “reasonable belief” exists where a reasonable person, under the circumstances known to the employee at the time, would conclude there is a real danger of death or serious injury if that person enters or remains on the premises. To learn more about this law, including exceptions. additional prohibitions and next steps, click here.
(10) New Postings on Human Trafficking Are Required for Certain Industries.
Hair, nail, electrolysis, skincare, and other related businesses are required to display a poster, as developed by the Department of Justice, that contains information relating to slavery and human trafficking, including information regarding specified nonprofit organizations that a person can call for services or support in the elimination of slavery and human trafficking. Covered businesses or establishments can be liable for a civil penalty of $500 for a first offense, and $1,000 for each subsequent offense for their failure to comply.
(11) And a Fun Fact: the Department of Fair Employment and Housing is now the Civil Rights Department, and the Fair Employment and Housing Commission is now the Civil Rights Council.
(12) Coming Next Grow Season (2024): New Marijuana Use Protections
Effective January 1, 2024, FEHA will be amended to provide that California employers may not discriminate in hiring, termination, or any term or condition of employment, or otherwise penalizing a person fozt:
- their use of marijuana while off-duty or away from the worksite; or
- where an employer-required drug test detects the presence of “non-psychoactive cannabis metabolites” in their hair, blood, urine, or other bodily fluids.
Employees still may be prohibited from possessing, using, or being impaired by cannabis on the job. The law expressly allows employers to make employment-related decisions based on tests that apply to current impairment, specifically scientifically valid pre-employment drug screening conducted through methods that do not screen for non-psychoactive cannabis metabolites, such as those that test for tetrahydrocannabinol (THC). Good luck finding one of those tests!
There are a host of exceptions: (1) employees in the building and construction trades; or (2) nonprofit religious associations and nonprofit religious corporations; (3) positions that required DOD clearance; and (4) applicants or employees subject to laws that mandate testing.
To do in 2024: make sure your drug test does not screen for non-psychoactive cannabis. And in the meantime, stay tuned, we anticipate more developments before this becomes a requirement.
Want to learn Five Things You Can Do in 2022
to reduce your risk of litigation?
Join our December 7, 2022 Breakfast Briefing
Please join us for our December 7, 2022 Year-End/New Year Breakfast Briefing to learn more of what happened in 2022, and what it means for your 2023 Work Community™.
As always, our briefing will be interactive and practical, and you will leave with tips and tools for being protected in the coming year(s). We will be covering all of the above, and more, in more detail.
Our Year-End Briefing will be Wednesday, December 7, 2022, from 9:00 a.m. - 11:00 a.m. This year will be hybrid: we will be hosting the event both in-person (2170 Fourth Avenue, San Diego, CA 92111) and by Zoom (link provided once you RSVP). Our in-person training is full right now, but you can join our waiting list. RSVP here, or give us a call at 619-906-2400 (ask for Patti) to register, and we will send you the details.