If you are a California employer, you probably already know that with each new year there are new laws that affect your business. Here is a summary of the key changes that will impact many small to medium businesses. Be sure to review these and reach out to Flourish HR with questions or help in complying.
The California minimum wage is going from $15.50 to $16.00 per hour on January 1. If you have employees below $16 per hour now, be sure to adjust their pay for the new year. Note that certain localities such as West Hollywood, Berkeley and San Francisco have minimum wages that are above the state minimum wage or have a mid-year wage adjustment. Be sure to check on your city. Additionally, fast food worker minimum wage will go to $20 per hour effective April 1, 2024.
Employees who are considered exempt must meet a threshold that is tied to the minimum wage. To be precise, it is two times the state’s minimum wage. The new exempt threshold will be $66,560 ($16*2*2080). If you have exempt (salaried) employee under $66,560 you will need to either bring them to this new threshold or convert them to non-exempt (hourly) status.
SB 616 makes some changes to the existing CA Sick Leave Law. Key changes you will need to consider:
If you have a plan that provides employees one hour of sick time per 30 hours of work, the current maximum accrual is 72 hours. In 2024 the maximum accrual will go up to 80 hours. Be sure your payroll system has the correct threshold.
If your current plan provides 24 hours up front to employees, the minimum number of hours will go up to 40 hours and must be provided to employees within the first 200 days of employment. With this plan, you do not have to carryover time because you will provide a new 40 hours with each new year except in Los Angeles where there is a carryover with a threshold of 72 hours.
This leave, effective January 1, provides for five days off for employees who experience a reproductive loss such as miscarriage or stillbirth and applies to employers with five or more employees and covers employees that have worked at least 30 days. Employers do not need to provide this time off with pay other than accrued sick or vacation time. Note that employers may not ask for a doctor’s note or other proof from the employee.
Applicant/ Employee Cannabis Testing Protections
This law, SB 2188, effective January 1, protects candidates and employees from hiring, firing and terms of work discrimination for off duty cannabis use.
Prohibits hair, blood, urine, or body fluid tests that screen for non-psychoactive cannabis metabolites that remain in a person’s system long after they use cannabis, but do not provide intoxication.
Instead, the law requires employers to use tests that prove the person was impaired by THC, the psychoactive component in cannabis.
Additionally, SB 700 prohibits employers from requesting information from job applicants relating to their prior use of cannabis.
In summary, employers can still prohibit employees from using or being impaired by cannabis at work but cannot prohibit use away from work that does not affect their work. In general, employers cannot ask applicants about their cannabis use or check their criminal history for cannabis use.
This law is effective July 1, 2024, and requires employers to develop and create a Workplace Violence Prevention Plan as part of their Injury and Illness Prevention Programs. This requirement applies to nearly all California employers with limited exceptions. Non-public employers of less than 10 employees are exempt.
Other California Legal Changes
Changes to the California Fair Chance Act (FCA) that impact background checks.
The addition of Business and Professions Code Section 16600.5 which makes it unlawful (not just unenforceable) to include a noncompete clause in an employment contract, or to require an employee to enter a noncompete agreement, that does not satisfy specified exceptions.
SB 699 enhances current state law that voids contracts that restrain an employee from engaging in a lawful profession, trade or business of any kind.