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The California Legislature has concluded its final session of the year, passing an abundance of new employment laws. Now that the Governor’s time to veto, approve, or allow these bills to take effect has passed, here are some key new laws that California employers should be aware of. Please note that this is only a summary of important new laws, and covers neither every new law nor every aspect of the laws below.
SB 699: Employee non-compete clauses have long been void under California law, except as part of an agreement for the sale of a business, dissolution of a partnership, or the dissolution or termination of interests in a limited liability company. However, this led to frequent litigation over the enforceability of non-compete agreements executed or relating to work outside of California, often turning on unpredictable and inconsistent choice-of-law analyses. This new law, which takes effect January 1, 2024, provides that non-compete agreements not within one of the above exceptions are void wherever the contract was executed, and prohibits employers attempting to enforce such agreements regardless of the place of execution or whether the employment was maintained outside of California against employees or prospective employees. It also authorizes employees, former employees, or prospective employees to bring a civil action seeking injunctive relief and actual damages related to an employer’s attempts to enforce such agreements, and to recover reasonable attorneys’ fees and costs if the employee prevails in such an action.
AB 1076: Like SB 699, this new law strengthens California’s ban on most non-compete agreements. It requires employers to provide written notice by February 14, 2024, to any current or former employee, who was employed after January 1, 2022 and who executed an invalid non-compete agreement, that the agreement is void. Notice shall be in the form of a written individual communication to the employee or former employee and shall be delivered to the last known address and email address of the employee or former employee. This law also provides that a violation constitutes unfair competition under California’s Unfair Competition law, Business and Professions Code section 17200, et seq.
AB 933: This law will make good faith claims of sexual assault, harassment, and discrimination protected speech and privileged. It goes into effect January 1, 2024, and will provide protection to survivors of sexual assault, harassment, and discrimination from defamation claims in attempt to ensure survivors are not discouraged from coming forward to report similar claims. This law includes among those privileged communications a communication made by an individual, without malice, regarding an incident of sexual assault, harassment, or discrimination, as defined, and would specify the attorney’s fees and damages available to a prevailing defendant in any defamation action brought against that defendant for making that communication.
AB 1228: This law attempts to resolve a bitter dispute over last year's AB 257, which created a state Fast Food Council with broad power to promulgate binding standards on wages and working conditions in the fast-food industry. In response, industry groups placed a referendum on the ballot for the November 2024 general election to repeal that law, enforcement of which was suspended while the referendum is pending. AB 1228 represents a compromise that will take effect only if the referendum is withdrawn by January 1, 2024. If it is, then AB 257 will be withdrawn as well, and a fast-food Council with more limited authority will be created. The law will also create a $20.00 per hour minimum wage for national fast-food chains, taking effect on April 1, 2024, which the fast-food Council can increase by no more than 3.5% or the Consumer Price Index each year. Additionally, the law will prohibit local governments from enacting more protective laws solely affecting the fast-food sector and remove the recently restored funding of the Industrial Welfare Commission, preventing it from issuing revised Wage Orders.
SB 553: This new law imposes new obligations on employers related to the prevention of workplace violence. It requires employers to establish, implement, and maintain a workplace violence protection plan by July 1, 2024, similar to existing injury and illness prevention plans. It also requires employers to track and log workplace violence incidents, to train employees on the workplace violence prevention plan, and to record logs of workplace violence incidents, training, and identification of new violence hazards. The law will also allow union representatives to seek workplace violence restraining orders on behalf of employees, starting January 1, 2025.
SB 616: This law makes a number of changes expanding employees' entitlement to paid sick leave. It raises the minimum number of hours of paid sick leave an employee must accrue and be allowed to use each year from 24 to 40 hours. It also provides that any authorized alternative to the standard accrual method (one hour of leave for each 30 hours of work) must result in the accrual of 24 hours by the end of an employee’s 120th day of employment and 40 hours by the 200th day. Employers who use an up-front leave allocation must provide at least 40 hours at the beginning of each year. The bill also raises the limit on the amount of leave that may be accrued and carry over to the next year from 48 hours to 80 hours.
SB 723: This law expands and extends employers' existing obligation to offer new available positions to employees who were laid off for reasons related to the COVID-19 pandemic. The requirement now extends to all industries, not just restaurants and hospitality as before, and creates a presumption that any non-disciplinary separation was related to the COVID-19 pandemic unless the employer proves otherwise by the preponderance of evidence. The law's sunset date was also postponed from December 31, 2024, to December 31, 2025.
SB 848: Effective January 1, 2024, this law will amend California's Government Code and require qualified employers to provide protected time off to employees for a "reproductive loss event." The term "reproductive loss event" is defined to mean a failed adoption, failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction. If the employee would have been recognized as a parent if the forementioned events were successful, the employee will be covered under this definition. Eligible employees are entitled to receive up to five days of protective time off that do not need to be taken consecutively but need to be completed within three months of the reproductive loss event. Employees are not required to provide documentation supporting the request for reproductive loss leave.
In addition to laws passed in 2023, last year’s AB 2188, which prohibits discrimination against a person in hiring, termination, or any terms or conditions of employment based upon an employee’s use of cannabis off the job and away from the workplace, takes effect on January 1, 2024. The law does not apply to the building or construction trades, or to any positions subject to federal background check, security clearance, or controlled substance testing requirements.