Key California Employment Law Updates for 2024!

California’s 2023 legislative session has come to a close, and as is the case each fall, the Governor has signed a number of new laws that will impact employers in the coming months. With a slate of new rules set to take effect as soon as January 1, 2024, it is critical that business owners and HR professionals ensure that their employee handbooks and policies are updated accordingly.

Read on for a summary of some of the most significant developments that will impact California workplaces in the near future, and if your policies or handbook have not been reviewed by legal counsel in light of these pending changes, feel free to reach out to us at wilder@clementsemploymentlaw.com.

Paid Sick Leave Increase

Under SB 616, starting January 1, 2024, the amount of paid sick leave that employers must provide to eligible employees under California’s Healthy Workplaces, Healthy Families Act will increase from 3 days or 24 hours to 5 days or 40 hours by the 200th calendar day of employment or every calendar year or in every 12-month period. The continuous accrual cap will also increase from 48 hours or 6 days to 80 hours or 10 days during those same time periods. 

Equal Pay and Anti-Retaliation Protection Act

Governor Newsom also signed SB 497, which amends the California Labor Code to establish a rebuttable presumption of retaliation if an employer takes adverse action against an employee (such as discipline or termination) within 90 days of the employee engaging in certain protected activities, including exercising their rights under the Equal Pay Act. The practical effect of these amendments, which are effective January 1, 2024, will be to make it easier for an employee to establish an initial claim for retaliation. These changes will also expand potential civil penalties to $10,000 per violation per employee.

Reproductive Loss Leave

Also effective January 1, 2024, is SB 848, which will require employers with five or more employees to provide up to five days of bereavement leave to eligible employees who have experienced a reproductive loss event. Following the event, defined as the day or final day of a multi-day process involving a loss such as a miscarriage, failed adoption, stillbirth, or unsuccessful assisted reproductive technology, an employee must take this leave within three months. The leave need not be taken all at once, and need not be paid unless an employer’s existing policies in this area provide for paid leave.

Cannabis Use by Job Applicants & Employees

Building on the protections that will be implemented next year under AB 2188, which prohibits discrimination against employees for their use of cannabis off the job and away from the workplace, SB 700 makes it illegal under California’s Fair Employment and Housing Act for employers to ask job applicants about their history of cannabis use. It also prohibits employers from utilizing information regarding past cannabis use obtained from an applicant or employee’s criminal history, subject to limited exceptions. Both laws are effective January 1, 2024.

Workplace Violence Prevention

SB 553, effective July 1, 2024, requires virtually all California employers to design and implement comprehensive Workplace Violence Prevention Plans. These plans, which must be put in writing and made accessible to employees, have multiple components such as detailed incident logs, staff training, and extensive recordkeeping. As of January 1, 2025, it also expands existing protections permitting employers to seek temporary restraining orders on behalf of employees who have suffered unlawful violence or credible threats of violence by allowing collective bargaining representatives to seek such orders, and for employees to remain anonymous in those proceedings.

Arbitration Agreements

Continuing the years-long evolution of the law surrounding arbitration agreements in California, SB 365 will amend the California Code of Civil Procedure to remove the automatic stay of trial court proceedings when a party appeals an order dismissing or denying a motion to compel arbitration. A trial court may still exercise its discretion to order a stay. Effective January 1, 2024, this law would serve to curtail the effectiveness of arbitration agreements under California law, but is expected to be challenged on preemption grounds. 

Non-Compete Agreements

In another area of law with nuances that are unique to California, two new bills have been signed to enhance the state prohibition on non-competition agreements in employment. Effective January 1, 2024, SB 699 makes it unlawful for employers to enter into or enforce non-competes, even if they were signed outside of California and pertained to employment maintained outside of California. Employees can enforce this law through a private right of action, and can pursue injunctive relief, actual damages, and attorneys’ fees. Further, AB 1076 seeks to codify existing case law and void any non-compete agreement in the employment context (subject to limited exceptions), no matter how narrowly tailored. This new law also creates a requirement for employers to notify current and former employees by February 14, 2024 that any non-competition agreements they have signed are void.

Minimum Wage Increase 

As of January 1, 2024, California’s minimum wage will increase to $16 per hour for all employers. The new year will also bring the required minimum annual salary for a full-time employee in California to be exempt from overtime to $66,560. Note that several local ordinances in cities like San Francisco, Oakland, Emeryville, Santa Rosa, and Petaluma carry minimum wage requirements that are higher than the statewide rate.

Berkeley’s Fair Work Week Ordinance

Effective January 12, 2024, Berkeley will be joining a handful of California cities including San Francisco and Emeryville in enacting a local fair work week or “predictive scheduling” ordinance. Berkeley’s new law covers employers with at least 10 employees in the city (and certain minimum numbers of employees globally), and whose primary industries include building services, hotel, health care, retail or restaurant (including franchisees), manufacturing, warehouse services, and non-profit work. Covered employers must comply with several requirements, such as providing employees with a written good faith initial estimate of their work schedules, at least two weeks’ notice of their work schedules on an ongoing basis, prompt written notice of schedule changes that are not employee-initiated, and predictability pay for scheduling changes where applicable. The ordinance covers non-exempt employees who perform at least two hours of work per week for covered employers.