Coffee Talk: California Employment Law Continues to Expand Worker Protections

Good morning, and thank you for joining Ramone's Coffee Talk today. I'm Christine Wittenhaven, Senior Human Capital Business Advisor at Ramone. Today we're fortunate to have Jennifer Gilland Duffy, Partner at Ramone PC, joining us. Her expertise spans employment law, employee benefits, executive compensation, family law, litigation, and alternative dispute resolution. Ms. Duffy will guide us through the latest developments in California's employment law landscape. We welcome your questions today, which can be submitted through the Q&A portal. We will discuss your questions at the end of the presentation. But before we dive into our presentation today, I just want to make a note of a few things: that this coffee talk does not constitute legal advice, nor does it establish an attorney-client relationship. Past outcomes do not guarantee future results. With that clarified, let's commence our presentation. Jennifer, over to you.

Thank you, Christine. Good morning or good afternoon to all of you, depending on where you're located. I have been practicing employment law for 25 years. I absolutely love it. I kind of view myself as an employment nerd, and I am here to talk to you about the 2024 California employment law updates. So I was a writer for the Daily Bruin newspaper at UCLA, and we were always taught that if you don't grab your audience in the first 3 sentences, you're going to lose your audience. So I decided to start with IRS mileage reimbursement rates. I include this in my updates each year so you can have the information about the standard $0.67 a mile, but also to let you know that there are other IRS mileage reimbursement rates. For example, for charitable organizations, and I know we have at least one nonprofit organization here, and that's $0.14 a mile. Minimum wage increase. So as of January 1st, 2024, the base minimum wage in California is $16 an hour. There is no longer a tiered system of smaller employers, larger employers. Everybody's at $16 an hour. With a whole lot of exceptions, but that's the base. The salary basis test for exempt employees is important, and each time there is an increase in a minimum wage, you have to look at the salary basis test for exempt employees. Now, you can't just make someone on a salary. They actually have to qualify under one of the California exemptions. and they have to qualify in their duties. They have to be high-end duties, and they need to make twice the minimum wage. So with this $16 an hour, your exempt employees, assuming they qualify, need to earn at least $66,560 a year in order to meet the salary basis test. Computer software employees have a new minimum hourly rate for exemptions, which is $55.58. So their minimum annual salary is just under $116,000 a year in order to be exempt. There's also a different exemption for physicians. So if that applies to you, let us know. So California always likes to be unique, and all of these cities have a different minimum wage. And some of them have a different minimum wage depending on how big the employer is. Like, the City of Novato is $16.60, but if it's less than 25 employees, it's $16.04, and if it's over 100 employees, it's $16.86. So my point being, make sure you check the city where your employee works. If they work at a location, that is the city you use. If they are a remote employee, it's the city where they live. So make sure you check that. So the two biggest minimum wage changes this year, fast food workers, it's $20 an hour as of April 1st, 2024. They have to have 60 or more establishments. I'm sorry, more than 60 establishments. I think that the point here was to try to create a living wage. One of the backlash on this is that fast food restaurants that are franchises have started to close. which is a very unfortunate byproduct of this. Healthcare workers, pretty much every single healthcare worker is now going to be part of a minimum wage that is not only a tiered system of rate, but then an annual tiered system of increases. So for the super large employers, which are 10,000 or more employees, The minimum wage is $23 an hour. For hospitals, the minimum wage is $18 an hour. For clinics and every other healthcare worker that aren't exceptions, it's $21 an hour. And the goal here, and there's a tiered system where eventually each of these folks will get to a $25 an hour minimum wage. And the exclusions are hospitals with the departments of state hospitals, tribal clinics and tribes and tribal organization outpatient settings. So it pretty much applies to everyone. If you do business with government contractors, you should speak to counsel because there are additional wage and hour requirements and more exceptions. All of these particular industries have a— have different wage and hour requirements. So I'm going to give you just 20 seconds to read through it and I'll be here while you do that. Okay, there is a new version of the I-9 form. The revision date of the new form is 8/1/23. It will be on the lower left corner of the form. And it's been about 4 years since we've had a new form. Meanwhile, effective in July of last year, you can now e-verify employment eligibility with your employees as long as you have enrolled in the e-verify program. And you can do this over a live video call like Zoom or Teams. This is very helpful with remote workers. One thing on this new form is there's an e-verify section. The form can now be fillable on tablets and mobile devices, and there's a section with respect to rehiring people. So additional paid sick leave benefits. This has gotten the most press, in my opinion. There are other things that are important, but this has gotten the most press. This year, you must provide to employees who have worked for you for 30 days or more in the last 12 months, 5 days or 40 hours of sick leave, paid sick leave per year, whichever is more. And the whichever is more part is dealing with part-time employees because a part-time employee who works, let's say, 6 hours a day, giving them 5 days of sick leave is less than giving them 40 hours of sick leave. So they would get the 40 hours. You can still do the lump sum front load. Everything gets put in their bank at the beginning of whatever your 12-month period is. Or you can do an accrual-based sick leave policy, which is the same as, as last year. I have found that restaurants and hotel industries like to do the accrual because people come and go so quickly. The more tenured employment locations tend to do the lump sum method because it is much easier to manage. There is a an accrual cap, but unlike the prior sick leave law, it's not automatic. So the employer has to put it in writing in a policy that they have an accrual cap on sick leave. It is now 80 hours or 10 days, whichever is more. And true to form, California cities have decided they're going to do their own sick leave. So these cities here, Berkeley, Emeryville, etc., have their own paid sick leave ordinances. So if you have a California employee who works or remotely lives in one of these cities, you definitely want to check. Next is reproductive loss leave, and this also is for an employee who's worked at least 30 days with you. They can take up to 5 days of protected leave if they suffer a reproductive loss event. And though that is defined as a failed adoption, a failed surrogacy, miscarriage, stillbirth, or unsuccessful assisted reproduction. They can, sadly, if they have— they can have up to 20 days of total reproductive loss leave within a 12-month period, which means they could have 4 reproductive loss events in 1 year. That's just tragic. It's all tragic, but the employee can use vacation, personal leave, and available sick leave. It's their choice. Otherwise, it's unpaid. You cannot request documentation to confirm the reproductive loss. Last year, I included this because this is important. A lot of people didn't know about this. If you have 5 or more employees, you have to provide bereavement leave of 5 It can be unpaid for any employee who has worked for you for at least 30 days. And there's a list here of who the decedent is who qualifies you for this bereavement leave as an employee. There's new protections for off-site, off-duty cannabis use. So at this point, we cannot discriminate or retaliate against an employee who uses cannabis off the job and away from the workplace in general. And if you do any kind of drug screening, the drug screening test cannot test for non-psychoactive cannabis metabolites. Now, what is that? That is the remnants of cannabis use that's in your hair, your blood, your urine, your saliva. And it's not a fair test of whether you are inebriated, as a cannabis user, because those particular metabolites stick around on the body far longer than the, the effects of the cannabis stick around in the body. So, your drug testing needs to not screen for that. There are some exemptions, building and construction, any position that requires state or federal background investigations or security clearance. That all makes sense. Those are companies and employers that need to make sure that they're not, probably not using at all. You can't ask about prior use of cannabis, and at the same time, you can still have a drug and alcohol-free workplace and require that people do not possess, be impaired by, or use cannabis on the job in California. This one got some press. I'm not sure why, because non-compete agreements have not been permissible in California for a very long time. A non-compete is where you say to the employee, when you leave here, you can't work for a competitor. And the Business and Professions Code has been amended, or it's an added section that makes this now a statute, an additional statute. What you're supposed to do, and I don't know if employers are doing this, is if you have such non-competition clauses in an agreement that was signed by a current or former employee, then you need to let them know in writing that that non-compete agreement is void. So I'm going to run through this very quickly. It is a lot of information. Beginning July 1st, so you have time, you need to develop and implement a work workplace violence prevention plan, every California employer. And it needs to be effective. It includes establishing a plan, training your workforce, keeping an incident log, and retaining your records. That's the summary. And there are specific requirements for each step. Now, you will be getting this document that I'm referring to here, so you don't have to be taking all the notes on this. You'll be getting it. But I'll go through this quickly because it's a lot. It can be part of your injury and illness prevention program. I call that a safety plan. Most people don't understand what a prevention program is. But yeah, it can be part of your safety plan and, or it can be standalone and it requires 13 elements. And I'm just going to go through these and touch on some of them. Who's doing it? What the procedure are procedures are for getting input on it, how to coordinate it, who's accepting and responding to reports, et cetera, et cetera, et cetera. And there are certain employers who are excluded: healthcare, California Department of Corrections and Rehabilitation, employees who work virtually from a location outside of the employer's control. So your remote employees working from home, you don't have to have a plan for them. If you have a closed workplace with fewer than 10 employees and law enforcement agencies. Next, you've been able to get workplace violence restraining orders for your employees for a very long time. That's what it's called, workplace violence restraining order. But that had only been for violence. So you have an employee whose former boyfriend or girlfriend continues to bother them and they're coming the location all the time, you can get a workplace violence restraining order on behalf of the employee, even without that employee's consent. Beginning next year, you can get a workplace restraining order for harassment. It doesn't have to have the violence component to it. So you are required as an employer in California to post a ton of information on postings for your employees. And it's easy when you have it at your office, you can just post it. Um, if you have remote employees, you need to tell them to post it at their home. I know that's weird, but you do. They don't have to do it. Don't tell them that, but you have to tell them they need to. And here's an example of the postings. This is with the California Chamber of Commerce. Anything that the California Chamber of Commerce puts Out I Trust. So if you buy their employment notices, and I pulled up their pricing here, it's, you know, it's not a ton. It's certainly worth the time to do that than to pull it together yourself. But this contains everything, and there's a new notice that needs to be provided. Which is a wage theft prevention notice. And if there is a federal or state emergency or disaster declaration, you need to post that too. I don't think you need to keep track of all of this. Just keep buying this poster from Cal Chamber and you're fine. And make sure that you get the current poster each year and you post it in a place that's frequented by your employees, which is usually in a break room or on the way to the restroom or something like that. All right, this in my opinion is the most important new law. Uh, it has gotten no press coverage as far as I know. It's huge. So there is now a 90-day rebuttable presumption for workplace retaliation. So what does that mean? I have a number of employers that I'm working with right now who have an employee who just came back from maternity leave. One who just took a medical leave of absence and their work product is not good. And if the company fires them, demotes them, puts them on even a performance improvement plan because it's disciplining them within 90 days of that protected activity, whatever it is, and there's a ton of protected activity in California, it is presumed that that was retaliation because of what the employee did that was protected. And in addition to everything else, there's now an up to $10,000 penalty if you do this. So this to me is huge. Now, it's not done. It's a presumption. So what that means is instead of the employee having to go in and prove a basic case of retaliation, The employee goes in, says, here's protected activity, here's the workplace retaliation that was in 90 days. Then the employer now has the burden. The burden shifts to prove that it wasn't retaliation. So often it's not retaliation, but if you plan to take any kind of adverse employment action against an employee, I want you to look backward 90 days to see if any protective activity has happened. And if it has, you should definitely speak with an attorney about this. So even if the 2 actions were totally unrelated, you don't want to get yourself in trouble. So changes to COVID regulations. Most people are kind of over all of this because it was here for so long and we had so many regulations, but the basics And I double-checked this last night. These January 9, 2024 guidelines are still effective. If someone has a symptomatic confirmed case, so they've taken the test, they're positive, and they have symptoms, they need to stay away from the workplace from the day they get the symptoms until 24 hours have passed with no fever. And the symptoms are mild and improving. For asymptomatic confirmed cases, test is positive, there's no infectious period. You don't have to isolate or exclude, and there's new rules on close contact testing. Really, the long and the short of it is it's really only if you have a major outbreak or a workplace outbreak that you have to do this. So This next one is changes to the background check process, and this expands on current law. So current law, you probably heard the expression ban the box. That's what it was called, ban the box. You can't require people to check a box to say, have you ever been convicted of a felony? That was prior law. That's still true today, but now there's additional restrictions, clarifications, and changes to the background check process regarding an applicant's criminal history. And this is significant also. You have to look at each individual person when— let me back up. Current law and law last year is you can't look for a background check on a criminal conviction history until after you've made a conditional offer of employment. That is still true. Now, when you do that background check for a criminal conviction history, you have to look at each individual person. And this goes into the detail, but you have to look at the nature and gravity of the offense. You know, what was the context? What was the degree of harm? How old was the person? The time that has passed. Was this last week or was this 10 years ago? The nature of the job held or sought. If someone's working, you know, with money and they've been convicted of money any criminal conduct, that is important. Once you do that individual assessment, if you've decided that you're going to not hire this person, you have to let them know in writing, and you need to give them at least 5 days to respond. And this is the only part of my presentation really, except the jokes and silliness, that isn't in here. If you decide after that, after that back and forth, not to hire the person, you have to give the employee or the applicant written notice that they're not being hired because of the criminal conviction, and you need to tell them they have a right to file a claim with the California Civil Rights Department, which is a lot. So if you have this scenario, I strongly suggest that you speak with your counsel. So I have 4 more things to tell you. I think I'm on time, which is good. Okay, before this year, if one of your employees came— got sick with COVID there was a presumption that it happened at the workplace and you needed to inform your workers' compensation carrier, and that insurance would have to provide coverage for whatever the damages were for COVID. That's no longer the case. That's done. There's no presumption about that. Also, with COVID-19, certain workers still have recall rights. The recall rights are extended. So what this means is they are out due to COVID, the— not that they have COVID, but the workplace isn't doing well. They've laid people off. Certain industries are requiring, are required to recall their employees. And this is, it's a really short list, but it's hotels, big private clubs, big event centers, airport, and certain building services. So if this applies to you, you should speak with counsel as well. So 2 more things. The definition of a joint employer. The classic example of a joint employer is I own a company, I hire all of my employees through a temp agency. Both I and the temp agency are the employers of that employee. We're a joint employer. This is true even if the temp agency handles all the paperwork, does all the payroll, processes everything, All I do is have the employee at my workplace and I tell them what to do. Joint employer. This definition has flipped and flopped over the last 45 years, literally about-facing back and forth. But why this is important now is the new rule. Not only can you show joint employment through direct evidence that both entities had control over the worker, but you can show by itself evidence of reserved or indirect control over the person. By itself, that's the new part. What does that mean? Reserved, indirect, unexercised control? I don't know. There isn't case law yet on this. But if you and another entity, you meaning the employer, and another entity are working in any kind of conjunction with each other for over worker, the likelihood is you are a joint employer and you're each liable for the employment mistakes of the other as well as yourself. And then the very last thing, so I like to go out with a bang. So here's something super interesting. Effective this year, you can provide unemployment insurance materials electronically, but the employee has to opt opt in to receive this and they opt in in writing. I don't have a form, that's not done yet, but it should be pretty straightforward if that's what you would like to do. So I'm going to stop sharing and I hope you have found this interesting. This is not all of the employment laws for 2024 that affect California workers, but it's, I think, the more important ones. And I thank you for your time, and I'll turn you back over to Christine.

Oh, thank you very much, Jennifer. We appreciate your time and sharing your insights today. I want to open up the questions. Let me check to see what we have. Can you hear me okay, Jennifer? Okay, good. I wanted to ask— there's a question here. Let's see. Are there any best practices or recommendations you can offer to help employers navigate through the regulations effectively?

Sure. I think the most important thing is that you update your policies. You can do a full handbook update. This year is a good year to do that because there are so many new laws and new things, but you can also do an addendum that says these policies supersede similar policies in our main handbook. Here's a small addendum. So you can work with our team. To do that, or whomever you'd like to work with. Training programs, the workplace violence is gonna require some training as well. And then I'm also a firm believer in Cal Chamber, California Chamber of Commerce. You can become a member, an annual member, and they give you forms and information and sample policies. It's awesome, but it won't help you with all the questions, which ones apply to you, but it's a good start. And then I use this book. It's the 2024 California Labor Law Digest by Cal Chamber. It's very large. It covers pretty much every issue in California, and I think it's under $300. And the first section is what's new for whatever year, 2024, and they list it all at the beginning. And then each new section, they put new next to it with a star inside the body of it. So it's an excellent resource. It will tell you when an issue is complicated and that you should speak with counsel. Of course, you can always speak with counsel. I'm a firm believer that spending 10 minutes with an employment law attorney is worth so much instead of making a poor decision or not bouncing it off of someone and ending up in litigation. So, very good.

Well, thank you for that. I have time for just one more question, and I wanted to ask to see what you thought about this. You know, these updates, and how do you compare them to previous years, and what should employers really take as a matter of significance here? Because I know you mentioned the new 90-day rebuttable presumption was very important. What's your advice?

So the first part of your question is how does this year compare to past? Last year, 2023, the big one was the paid sick leave law for the 3 days, 24 hours. There wasn't really much else. And the prior years going backward from there, there were just 1 or 2 small things, you know, the bereavement leave last year. This year there's so much. It's a lot. There's a lot of new stuff. And I think it's important that employers get educated on this, so I commend anyone who's attending this webinar. I'm not sure I answered all of your question or the question that was presented, but that's the comparison. And again, I just think that if you have a question, your employment law counsel has probably heard a similar scenario before and will have some insight for you. So that would be my suggestion.

Well, thank you very much, Jennifer, for all your time and insights today. I wanted to let everybody know that you will definitely receive a link of today's presentation by email. And thank you everyone for joining us. Our next Coffee Talk will be in June 2024, and we eagerly await your presence as well. So until then, have a great day and thank you again.

Thank you everyone.