Episode 230: Keeping Up with Mid-Year Employment Law Updates

Welcome to the Workplace, a podcast by Cal Chamber. I'm Matthew Roberts, Associate General Counsel with the California Chamber of Commerce. Hello listeners. Amazingly, we have already crossed the halfway point in the year, and as we know, employment law changes aren't limited to just the beginning of the year. This year we have had a number of changes, from regulatory actions to court decisions to ongoing statutory changes and other reminders to make sure that we are on top of all the mid year happenings. We welcome back Bianca Saad, Cal Chambers General Counsel for Labor and Employment, and Erica Barbara, Senior Employment Law Council. Thank you both for being here with me today. Bianca and Erica.

Absolutely. Matt, always happy to be here.

Hi Matt. Happy to be here as well.

All right, well, we have a busy schedule on today's agenda, so I think we'll start from the top down. Nothing will bring change mid year faster than a change in presidential administrations at the federal level, which did in fact take place year. So Bianca, can you highlight the major actions that took place after President Trump took office earlier this year?

Yes. So we had some major actions taken almost immediately after the administration switch back in January, and one of those was under Executive Order 14173, titled Ending Illegal Discrimination and Restoring Merit Based Opportunity. This Executive Order did a couple of things. First, it revoked longstanding Executive Order 11246, which required federal contractors to engage in affirmative action efforts as it related to hiring. The Executive Order had been in effect for six decades until it was revoked by Executive Order 14173 on January 21, 2025. So the revocation allowed federal contractors to follow the old rules for 90 days while they winded down their affirmative action efforts. Now, the Office of Federal Contract Compliance Programs, or ofccp, has issued proposed rulemaking to rescind all regulations that gave effect to old executive order 11246. So federal contractors still must follow ordinary anti discrimination laws like Title VII and California's Fair Employment and Housing act, and they should consult with legal counsel about winding down compliance with affirmative action regulations. Second, there is another provision of Executive Order 14173 that encourages the private sector to end what it refers to as a legal discrimination and preferences. And the dei, of course, is referring to diversity, equity and inclusion. So a lot of confusion stemmed around what constitutes illegal DEI policies and practices. Ultimately, the EEOC released guidance after the Executive Order that described programs that provided advantages or disadvantages in employment based on race or sex as illegal. This provided minimal additional compliance issues for employers since programs of this type have long been unlawful under Title vii Now, employers may still maintain DEI programs, but they should vet them to ensure those programs both accomplish their desired outcomes and are in line with meaning they don't violate federal or state anti discrimination laws. And lastly, President Trump issued a separate executive order 14168 that sets the policy of the US that there are only two biological sexes and genders and that these cannot be changed after birth. Mostly this impacts gender expression and gender identity issues in the workplace. Now, it's important to note, even under federal law, employers still can't discriminate against employees based on the employee's gender identity or expression and even if those differ from their biological sex at birth. The key changes at the federal level may come from EEOC guidance changes around pronoun and restroom usage. However, that guidance does not impact California law as the state requires explicit protection for pronoun and restroom usage.

It was quite a whirlwind of action to start the year, huh, Bianca? Oh yes, I think I still have a little bit of PTSD from trying to keep up with everything that happened in January and February. Now that's not all that we might see down the road even later this year at the federal level. So what might else that we see when we have presidential administration changes?

Yeah, we definitely expect to see changes in the composition of the boards and commissions and with that will result a change in priorities over time. So currently the National Labor Relations Board or the nlrb, which sets guidance and issues orders related to workers concerted activities, doesn't have a quorum and neither does the eeoc. So when those things happen down the road and we do get to that place where we have a quorum and as new board members and commissioners are added, then we would see changes. We expect to see changes right to recent guidance and precedents which could then impact employers.

All right, so we'll keep our eyes open as the federal government continues to move along and moving towards President Trump's priorities. So Erica, let's move to California. Specific updates now. And as always, what we like to focus on in the wage now arena are minimum wage updates. Of course, now many employers know to make sure that non exempt and exempt employees are paid appropriately starting January 1st each year as the statewide minimum wage normally increases on that date. But now we have a patchwork of other different types of laws here in California that's staying on top of minimum wages is really more than just a beginning of the year exercise. So Erica, can you give us a rundown of what mid year minimum wage issues we should be aware of as California Employers?

Yeah, definitely. So California now has a whole host of cities and counties that have their own local minimum wage ordinances, which means that employers need to know where their employees are working and whether those employees may be covered by one of these local minimum wage requirements. Now, some of the local minimum wage rates increase on January 1st, like our state minimum wage does, but a number of them don't. Instead, they have July 1st increases. So the localities that had an increase on July 1st to the minimum wage are Alameda, Berkeley, Emeryville, Fremont, the city of Los Angeles, and the unincorporated parts of Los Angeles County, Milpitas, Pasadena, San Francisco and Santa Monica. Malibu is usually included on this list because it does increase its minimum wage on July 1, but the increase was suspended this year in response to the devastation from the wildfires that occurred in that area. Now, all the local ordinances are a little different, but many have a similar structure and require that really very little work needs to be performed in the jurisdiction each week to trigger coverage. And performing work can even include traveling for work purposes through the locality. And some local ordinances also impose special minimum wage rates for hotel workers. So if you're in that industry, you want to make sure to verify if your city or county has a local hotel worker minimum wage requirement. Now, as if state and local minimum wages weren't enough, last year, California implemented two industry specific minimum wages, the fast food worker minimum wage and the healthcare worker minimum wage. The fast food worker minimum wage is still $20 an hour. That's what it was when the law went into effect and it has not increased. However, it's possible that at some point the Fast Food Council could increase that rate. Now, the healthcare worker minimum wage law has different minimum wage schedules built into it based on the type of covered facility. And some of those facilities did have scheduled increases on July 1st of this year. So certain facilities increased from $23 an hour to $24 an hour on July 1st, including hospitals and health care systems with 10,000 or more employees, dialysis clinics and healthcare facilities run by counties with at least 5 million residents as of July 1st of 2023. In addition, the minimum wage for certain facilities increased from $18 an hour to $18.63 an hour, and including safety net hospitals with high levels of Medicare, medi Cal coverage, rural and dependent health care facilities, and then healthcare facilities run by counties with 250,000 or fewer residents as of January 1, 2023. And if that wasn't enough, remember in addition, that if you're affected by any of these July 1st minimum wage changes, you likely need to update your workplace posters. So make sure you're up to date on your workplace posters related to any local minimum wa.

All right, well, speaking of postings, Erica, are there any other mid year notice changes in addition to those minimum wage postings that we should be aware of?

Of course, because it wouldn't be a California mid year update without a new poster requirement.

Of course not, Erica.

We have our California specific leave, victims of crime or abuse leave. This is not a new leave, but it was expanded effective January 1st of this year to increase the reasons why the leave can be taken and and the family members that are covered by the leave law. And as part of this expansion, the California Civil Rights Department was directed to create a new model notice of employee rights. Under the law, the Civil rights department, or CRD, had until July 1 to release the notice. It did in fact, release the notice on July 1st. So now all employers have to provide this new notice to employees at hire, to all employees annually, and then anytime an employee requests the notice or requests this kind of leave, or anytime an employee informs an employer that they or their family member is a victim of crime or abuse under the law.

All right. So important to keep in mind that notice is up and we do need to get that thing going as of today. All right, Erica, any other statutes, new laws, or reminders that employers should be aware of before we move to the courts?

Yeah. One last law that we should mention is California's general industry workplace violence prevention standards. Now, these went into effect last July 1st, and we've talked about these standards at length on the podcast and elsewhere. But since we just passed the one year anniversary of the law taking effect, there are a couple of important reminders. So first, the law requires that employers have a written workplace violence prevention plan. So the plans should have been implemented by July 1st of last year. So if you haven't done that yet, you want to make that a priority now to get that plan in place. And the plan is not a one and done. Employers have to review their plans annually. So even if you implemented your plan on time last year, you'll still need to review it this year. And that includes assessing your workplace for hazards, assessing how mitigation strategies are working, and providing employees the opportunity to comment on how the plan is working so far and any changes that may be needed. And when you do that review, you want to make sure that you're documenting it to show compliance. Second, the law requires employers to train employees on the specifics of their plan. So employers must have done this training at the time the plan was established, so likely last year. But then we also need to train employees on the plan annually, even if there are no changes to your plan. So that means employers must be conducting the training again this year and every year after that. So for employers, it's really important to know that your workplace violence prevention work is ongoing. So if you're struggling in any way, we've got lots of resources that can help, including a workplace violence toolkit with a model plan that employers can customize to their workplace, a support service that allows employers to work with one of our employment law experts to create their plan, and a customizable computer based course to train employees on their plan.

Okay, well, let's move to story time. Always one of my favorite parts of new law updates here and every year, both at the beginning of the year, middle of the year, end of the year, it seems we have at least one big wage and hour case that at least helps provide employers some additional guidance on wage and hour law. And this year is no different, right, Bianca?

That's exactly right. So this year we finally have a case that addresses meal waivers and whether employers can use an employee's blanket meal waiver, signed it higher for the duration of the employee's employment. So in Bradsbury vs. VCar Operating, Inc. The employer allowed employees to sign a prospective meal waiver that would be effective going forward in the future for any meal break they waived should the employee shift be six hours or shorter, in accordance with California law. So employees eventually brought a class action suit claiming these waivers are invalid and suggested that the waivers need to be done at the same time as each break is waived. The California appellate court ruled in favor of the employer and held that as long as the prospective waiver signed at the time of hire was done so without coercion or in some other unconscionable manner, then these waivers can be valid. Now, it is worth noting that the plaintiffs in this case didn't argue unconscionability, but nonetheless, this was a win for employers.

Yeah, I think that's really a big deal because we get this question a lot around, can we just have them sign meal waivers with their whole onboarding package? And we've never really known the answer to this question, or at least we've never really been given specific guidance by the courts, so at least a step in the right direction. And of course, Bianca, when we talk about unconscionability and things like that, we're just looking at fundamental fairness, right? Telling them what the document is telling them it's voluntary and anything else, right?

Yeah, that's exactly right.

All right. Well, in addition to wage and hour, of course, discrimination and harassment claims will sometimes pop up and provide fodder for the courts to help provide context to these laws as well, especially since a lot of discrimination and harassment claims are contextual in terms of what's the conduct, what happened around the conduct, what were the motivations around the conduct. So, Erica, what have we seen so far from the courts in these types of claims?

Yeah, so we actually got a significant decision from the US Supreme Court addressing reverse discrimination, which is discrimination against someone who's a member of the majority of a protected class. So the case, which is Ames v. Ohio Department of Youth Services, involved an employee who sued her employer for discrimination, claiming that she was denied a promotion and then demoted because of her sexual orientation. Now, the employee, who is heterosexual claims she lost a promotion to a gay woman and was demoted in favor of a gay man. Now, the case made its way to the U.S. supreme Court because there was a split among the federal courts on how to deal with these type of reverse discrimination claims. Some of the U.S. courts of Appeal have held those types of claims to a higher standard of proof, requiring that plaintiffs show the existence of additional background circumstances to establish that their employer discriminated against individuals who were in the majority of a protected class. Now, the US Supreme Court overturned that standard and confirmed that reverse discrimination claims are to be held to the same standard as any other discrimination claim, meaning that the plaintiff in a case such as this must show evidence of discriminatory animus towards them because of their protected class, but that they don't have to show any additional background circumstances to show that they were discriminated against because of their protected class. So regardless of whether a plaintiff is in the minority or the majority of a protected class, the standard for establishing a discrimination claim will be the same.

All right, excellent. Well, as we have mentioned at the outset, employment law just doesn't sleep throughout the year. So it's always good to stay in touch with us and all of your employment law resources. So, Bianca and Erica, this is quite a list of mid year updates to digest and I am very appreciative of both of you taking the time to discuss them with me today.

My pleasure, Matt. Thanks for having me.

Thanks for having me, Matt.

And thank you listeners for joining this discussion on the workplace. Please share and subscribe to Cal Chamber's podcast by visiting calcham.